Trade War is Joined

June 15th, 2009 | Sources: Washington Post

Subjects:

The Big O’s January Economic Hail Mary instructed stimulus recipients to “buy American,” forcing the town of Peru, Indiana, to ditch its Canadian sewage pump supplier in favor one located in Uncle Sam’s back yard.

OldGlory,newproblemsThe next week, a US government official noticed evil Canadian pipe fittings at a California construction site.

He had them excavated and replaced with those bedecked in red, white and blue.

Now, the Maple Leafs are fighting back. Several Ontario towns have barred US companies from their municipal contracts, a shot over the US bow that, if allowed to escalate, could cause US-based companies to lose billions derived from Canadian projects.

The two countries can hardly be blamed for attempting to keep jobs domestically in the midst of the Great Economic Crisis, but the moves may backfire.

Take the Duferco Farrell Corporation, a Pennsylvania-based steel plant that employs 600 people. It manufactures coils using imported steel slabs for which there are no US suppliers. This partially foreign production process does not meet the Hail Mary’s “made in the USA” criteria.

That has forced Duferco’s biggest customer, a neighboring steel pipemaker, to cancel its orders which forced Duferco to furlough 80% of its workforce.

“I’ve got 600 United Steel Workers who are going to lose their jobs because of this,” seethed Bob Miller, the company’s EVP to the Washington Post. “You tell me this is good for America?”

And John Hayward, president the Canadian pump manufacturer that got shafted by the Peruvians was equally displeased. “We’re not China. We’re not even Mexico. We have the same relative cost of labor as you do,” he told the Post.

“If we have a better price, you should buy from us. That’s what competition is supposed to be about.”


 

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