(World Trade Interactive)
Domestic business groups and foreign governments are cautioning the U.S. against the proliferation of “Buy American” provisions. The primary concern is that other countries will pursue similar measures, sparking a trade war that could significantly hamper prospects for economic recovery.
In comments on the Buy American requirements included in the economic stimulus bill passed earlier this year, the U.S. Chamber of Commerce said events are beginning to validate its prediction that these requirements “would have numerous unintended consequences on the United States and harm American workers and companies.”
For example, there is “a high degree of confusion” among government agencies and private-sector contractors as to what exactly is covered under the statutory language, a situation that is “even further exacerbated at the state and local levels,” where these issues are “completely unfamiliar concepts.”
This confusion has caused both the government and businesses to “be overly cautious and not take into account certain exemptions due to an incorrect belief that certain products are covered that are in actuality not covered,” which in turn has caused “many of our trading partners tremendous concern.” The Chamber cautioned that more U.S. manufacturers could feel the adverse impacts of the Buy American mandate as time goes on if the government does not provide guidance on which products are covered and allow additional exemptions. Read more here.
