‘Buy American horror stories’ in Canada

The Canadian daily National Post has a good piece out today that highlights how the ‘Buy American’ provision is being seen in Canada.  Many see it as an affront that America could and would favor domestic firms over those of its largest trading partner and next-door neighbor despite the North American Free Trade Agreement.

For the second time in six months, pipe fittings in California are being ripped from the ground because they were stamped "Made in Canada," a move manufacturing companies say hurts both sides of the border.

Cambridge Brass Inc., a Canadian brass fittings manufacturer, discovered Thursday that it stands to lose more than $1.5- million in this most recent fallout from the Buy American protectionist measure.

Greg Bell, vice-president of sales and marketing for the Cambridge, Ont., company, received a call Thursday from the City of Sacramento, where the parts were being fitted into the public water system. He was told his product was no longer acceptable because it was not made in the United States.

"It’s disheartening. (The city) wants American-made products and there’s nothing I can do about it," Mr. Bell said. "Business is tough enough these days without having to deal with these roadblocks."

Anything already in the ground will have to be ripped back up at Cambridge Brass’s expense, Mr. Bell said. Between the costs of losing the project, pulling up the pipes and legal fees, he estimates his company stands to lose money in the seven-figure range.

Cambridge Brass has been based in southern Ontario for more than a century and has survived two world wars and the Great Depression, but Buy American may be what finally causes the company to bid farewell to the province.

Mr. Bell said losing a major project like this would mean more layoffs for the already suffering company.

It has already lost a supply distributor in Maine, and it has had to lay off half of its own employees in Cambridge – from a workforce of 140 it is now down to 77 – since the introduction of Buy American policies this year.

And if these protectionist measures continue, he said, the company will likely be forced to move its manufacturing to the United States in order to stay in business.

America seems clueless at how protectionist policies build rage that politicians abroad must quell or heed through retaliation. It’s as if only American politicians want to protect jobs.

It bears repeating because some people don’t get it: it’s not the act of protectionism itself which is so damaging, it is the retaliation and escalation that results.

"The government has got to stand up and propose some serious retaliation," said John Hayward, president of Hayward Gordon Ltd., noting the Halton Hills, Ont.-based industrial-pump manufacturing company has been barred from bidding on U.S. products. He said he has had to switch manufacturing from three Canadian plants to U.S. sites in order to stay in business, a survival decision that has resulted in local layoffs.

Read the full account below.

Source

‘Buy American horror stories’ building – National Post

4 Comments
  1. Guest says

    It seems every day it becomes more obvious that America is rudderless, there’s no one at the helm anyway and the sails are in tatters.

    Canada, China, the EU, Britain, Russia, Iran, … can you think of anyone who aren’t shaking their heads in disgust and frustration at the US? Israel, I suppose… lot of good that’ll do them.

    I suppose one way to severely deflate your currency is to ensure every other country in the world loathes every second they are forced to do business with you.

  2. kynikos says

    How would a trade war be bad even if we do assume the retaliation? How does it harm American and Europe workers? Regarding the latter, it might decrease German exports.

    Even if there would be retaliation, the retaliation means the politicians in those countries care about their citizen’s interests, not the interest of capital, and their reactions to protect their own citizen should be respected as it is a sign of virtue that they are willing to protect their constituents interests.

    A protectionist regime, even with retaliation, would benefit most workers in developed countries because it reduces the labor supply by making cheap foreign labor too expense because its cost is raised via tariffs. Furthermore, it increases capital’s exit costs thus reducing the mobility of capital.

    A trade war? Smoot-Hawley II?… bring it on!!! I am willing to gamble with protectionism as a means of reducing the influence of the globalized predator class.

    BTW, Smoot Hawley did not cause the Great Depression, nor did it make it “Great.” See this:

    http://www.exponentialimprovement.com/cms/smoot.shtml

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