# Just how Protectionist is President Obama? **URL:** \ **Category:** Great Debates\ **Created:** [January 30, 2009, 1:12am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655 "2009-01-30T01:12:42Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 30, 2009, 1:12am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/1 "2009-01-30T01:12:42Z")
[http://www.canada.com/topics/news/world/story.html?id=1232625](http://www.canada.com/topics/news/world/story.html?id=1232625) > [@](#): > > OTTAWA - Prime Minister Stephen Harper expressed “serious concern” on Thursday over a provision of the U.S. stimulus bill that would require infrastructure projects to use American steel, putting Canada on the edge of its first trade dispute with the United States since Barack Obama was inaugurated. > > The “Buy American” clause would ban the use of most foreign iron and steel from infrastructure projects funded under the US$819-billion stimulus bill, which passed the U.S. House of Representatives on Wednesday. > > On Thursday, Harper added Canada’s name to the growing list of U.S. trade partners, from the European Union to Australia, who are seeking to overturn the provision. > > “This is obviously serious matter and a serious concern to us,” Harper told the House of Commons, adding that he had spoken about the matter with Canada’s ambassador to the U.S., Michael Wilson. ---
**Author:** ![cletus](https://avatars.discourse-cdn.com/v4/letter/c/f08c70/32.png) [@cletus](https://boards.straightdope.com/u/cletus)\ **Post date:** [January 30, 2009, 2:09am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/2 "2009-01-30T02:09:46Z")
I thought protectionist policies was what caused the Great Depression to be so bad? Are we headed for another Great Depression now? ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 30, 2009, 2:16am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/3 "2009-01-30T02:16:02Z")
> [@cletus](#): > > I thought protectionist policies was what caused the Great Depression to be so bad? Are we headed for another Great Depression now? Yes, and I don’t know. ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [January 30, 2009, 6:34am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/4 "2009-01-30T06:34:37Z")
That really isn’t Barack’s call to make - the United States and Canada have a trade agreement called NAFTA (North American Free Trade Agreement) that probably specifically states that he can’t do that (I don’t know the specifics, but it addresses issues like this). We’ll be seeing you guys in the world trade courts, AGAIN, and we’ll kick your asses AGAIN. This is starting to seriously piss me off - first the US takes the Canadian economy (which was thriving) down into the shitter with your greed and stupidity, now you want to cut us off from trading with you to damage our industries further. You guys are not being a good neighbour at all. As for the OP, Barack can’t afford to be too protectionist - as Harper has said, if Obama wants to revisit NAFTA, we’ll put oil on the table, too - Canada is the largest supplier of oil to the US. We’re all in this together thanks to our global economy - the US needs to remember that there is a world outside of its borders. ---
**Author:** ![Lakai](https://avatars.discourse-cdn.com/v4/letter/l/9de0a6/32.png) [@Lakai](https://boards.straightdope.com/u/Lakai)\ **Post date:** [January 30, 2009, 7:17am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/5 "2009-01-30T07:17:43Z")
Report on this from [The Economist.](http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13031019) Essentially saying that the current Democrats should learn some fucking history. Protectionist talk is pretty popular now that the Democrats won, and I don’t think anyone will risk speaking out on how bad it really is. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [January 30, 2009, 7:25am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/6 "2009-01-30T07:25:25Z")
The problem they have is that the the ‘fiscal multiplier’ they are using to justify this $800 billion monstrosity of a spending package only works if you assume that all the money is spent within the country and all idle resources put into play are American. That’s why they need the provision to prevent their multiplier from leaking away. Without it, the U.S. winds up spending $800 billion to stimulate the economies of Canada, China, and South Korea, among others. But they’re in for a rude shock if they think steel and iron are the only things that might be imported in infrastructure building. The modern construction supply chain is truly global - everything from engineering consulting to shipping to control systems can and will be imported. Yet another reason why a centrally-commanded stimulus is going to be a boondoggle. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [January 30, 2009, 7:45am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/7 "2009-01-30T07:45:31Z")
I’m confused, aren’t you guys (and the Economist) confusing protectionism (stopping or limiting specific imports to \*\*all \*\*industries in the US) with a preference of “made in America” steel and other items that will be used \*\*only \*\*on stimulus-related purchases and industries that will be benefited by the stimulus plan? IMHO unless you can show me that the plan is to prevent \*\*all \*\*industries from getting steel from other countries I think calling this protectionism is misleading. ---
**Author:** ![mswas](https://avatars.discourse-cdn.com/v4/letter/m/e99b99/32.png) [@mswas](https://boards.straightdope.com/u/mswas)\ **Post date:** [January 30, 2009, 7:53am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/8 "2009-01-30T07:53:06Z")
> [@GIGObuster](#): > > I’m confused, aren’t you guys (and the Economist) confusing protectionism (stopping or limiting specific imports to \*\*all \*\*industries in the US) with a preference of “made in America” steel and other items that will be used \*\*only \*\*on stimulus-related purchases and industries that will be benefited by the stimulus plan? > > IMHO unless you can show me that the plan is to prevent \*\*all \*\*industries from getting steel from other countries I think calling this protectionism is misleading. On another forum someone was posting WTO provisions that seemed to agree with you, but it was over my head. ---
**Author:** ![Lakai](https://avatars.discourse-cdn.com/v4/letter/l/9de0a6/32.png) [@Lakai](https://boards.straightdope.com/u/Lakai)\ **Post date:** [January 30, 2009, 8:55am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/9 "2009-01-30T08:55:49Z")
> [@GIGObuster](#): > > I’m confused, aren’t you guys (and the Economist) confusing protectionism (stopping or limiting specific imports to \*\*all \*\*industries in the US) with a preference of “made in America” steel and other items that will be used \*\*only \*\*on stimulus-related purchases and industries that will be benefited by the stimulus plan? > > IMHO unless you can show me that the plan is to prevent \*\*all \*\*industries from getting steel from other countries I think calling this protectionism is misleading. [From Wiki:](http://en.wikipedia.org/wiki/Protectionism) > [@](#): > > Protectionism is the economic policy of restraining trade between nations, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies. The current stimulus would fall under the “discouraging imports” part. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [January 30, 2009, 9:30am UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/10 "2009-01-30T09:30:46Z")
> [@Lakai](#): > > [From Wiki:](http://en.wikipedia.org/wiki/Protectionism) > The current stimulus would fall under the “discouraging imports” part. That is still “may” as even the Economist had to acknowledge, I still think the “discouraging” part is not so clear. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [January 30, 2009, 1:47pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/11 "2009-01-30T13:47:51Z")
> [@featherlou](#): > > That really isn’t Barack’s call to make - the United States and Canada have a trade agreement called NAFTA (North American Free Trade Agreement) that probably specifically states that he can’t do that (I don’t know the specifics, but it addresses issues like this). We’ll be seeing you guys in the world trade courts, AGAIN, and we’ll kick your asses AGAIN. No, we won’t. Bilateral trade agreements are BILATERAL. Either the two sides agree or they don’t. If either Canada or USA choose to ignore NAFTA it will not work insofar as the good in question is concerned. And this “you guys suck we’ll kick your asses” stuff is ridiculous. You say in one breath the USA is our biggest customer and then on the next are angry they might not buy as much as they used to. If you reduce your entertainment budget, is Famous Players entitled to be pissed off at you? ---
**Author:** ![Cat\_Whisperer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cat_whisperer/32/4839_2.png) [@Cat\_Whisperer](https://boards.straightdope.com/u/Cat_Whisperer)\ **Post date:** [January 30, 2009, 2:01pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/12 "2009-01-30T14:01:12Z")
Sure, if Famous Players and I have an agreement that I will buy X amount of movie tickets every year and reductions in those purchases or extra tariffs added onto them have to be agreed on by both sides. The ass-kicking to which I was referring was the ongoing conflict between Canada and the US over softwood lumber tariffs. We have been fighting the US in world trade courts over it for years now, with rulings in our favour every so often. I’m not sure what you mean by NAFTA not working; the result of world trade court rulings in our favour is large penalties paid to us from the US; that seems like NAFTA is working okay - they broke the agreement, we sued, we won, they are awarded a penalty. I don’t expect much else to come out of broken trade agreements. [This article](http://www.digitaljournal.com/article/266155)sums up my concerns pretty well: > [@](#): > > However, not all industry groups are in favor of protectionist measures and a coalition of major exporters, including Boeing, Caterpillar and General Electric are concerned about a major free trade war breaking out and possible retaliation by foreign governments over the issue. I don’t want a free trade war with the US - I want our industries and their industries to continue along at a healthy pace. I don’t see the US setting protectionist policies as helping anyone, including the US. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [January 30, 2009, 2:24pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/13 "2009-01-30T14:24:54Z")
> [@featherlou](#): > > The ass-kicking to which I was referring was the ongoing conflict between Canada and the US over softwood lumber tariffs. We have been fighting the US in world trade courts over it for years now, with rulings in our favour every so often. I’m not sure what you mean by NAFTA not working; the result of world trade court rulings in our favour is large penalties paid to us from the US; that seems like NAFTA is working okay - they broke the agreement, we sued, we won, they are awarded a penalty. I don’t expect much else to come out of broken trade agreements. I didn’t say NAFTA didn’t work. NAFTA WON’T work if the two sides don’t want it to. The USA could have continued to ignore the softwood lumber rulings - as they did for years - if they wanted to. Trade agreements are two-way streets; if one side doesn’t want to live up to it they can ignore or cancel the treaty. What certainly is not going to foster a spirit of cooperation and bilateralism is “We’re gonna kick your ass! You ruined our economy!” Did you write posts of beaming praise for the “United Statesians” in 2004 when we were living high off the hog in 2004 when their economy was rolling? [This article](http://www.digitaljournal.com/article/266155)sums up my concerns pretty well: I don’t want a free trade war with the US - I want our industries and their industries to continue along at a healthy pace. I don’t see the US setting protectionist policies as helping anyone, including the US. [/QUOTE] ---
**Author:** ![Rysto](https://avatars.discourse-cdn.com/v4/letter/r/ecccb3/32.png) [@Rysto](https://boards.straightdope.com/u/Rysto)\ **Post date:** [January 30, 2009, 2:53pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/14 "2009-01-30T14:53:58Z")
> [@featherlou](#): > > That really isn’t Barack’s call to make - the United States and Canada have a trade agreement called NAFTA (North American Free Trade Agreement) that probably specifically states that he can’t do that (I don’t know the specifics, but it addresses issues like this). We’ll be seeing you guys in the world trade courts, AGAIN, and we’ll kick your asses AGAIN. And by “kick your asses”, we mean we’ll pay billions in tariffs and accept import quotas. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [January 30, 2009, 3:22pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/15 "2009-01-30T15:22:01Z")
Which leads us back to the meat of the discussion: Tariffs would be a catastrophe. It was tarfiffs, not the stock market crash, that were largely responsible for the Great Depression. Naturally, Jack Layton immediately announced that protectionism is a great idea and that Canada should enact tariffs of its own. A new depression would be terrific for his prospects. ---
**Author:** ![Malthus](https://avatars.discourse-cdn.com/v4/letter/m/85f322/32.png) [@Malthus](https://boards.straightdope.com/u/Malthus)\ **Post date:** [January 30, 2009, 3:28pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/16 "2009-01-30T15:28:18Z")
This is what I was worried about in this past election. Obama seems such a wonderful choice in almost every respect, but the _one_ area he is weak on - a seeming fondness for protectionism - may turn out to be the most significant: protectionism was, after all, one of the things that made the Great Depression so “great”. ---
**Author:** ![Lantern](https://avatars.discourse-cdn.com/v4/letter/l/d26b3c/32.png) [@Lantern](https://boards.straightdope.com/u/Lantern)\ **Post date:** [January 30, 2009, 4:23pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/17 "2009-01-30T16:23:46Z")
> [@](#): > > It was tarfiffs, not the stock market crash, that were largely responsible for the Great Depression. This is an oft-repeated myth which is simply not true. The Smoot-Hawley laws were stupid but were most certainly not “largely responsible” for the Depression. Once again the indispensable article on the Depression by Christina Romer: [http://elsa.berkeley.edu/~cromer/great\_depression.pdf](http://elsa.berkeley.edu/~cromer/great_depression.pdf) > [@](#): > > The 1930 enactment of the Smoot-Hawley tariff in the United States and the worldwide > rise in protectionist trade policies created other complications. The Smoot-Hawley tariff was > meant to boost farm incomes by reducing foreign competition in agricultural products. But other > countries followed suit, both in retaliation and in an attempt to force a correction of trade > imbalances. Scholars now believe that these policies may have reduced trade somewhat, but > were not a significant cause of the Depression in the large industrial producers. As for these rules they aren’t that important since they apply only to stimulus spending. What would be a serious problem would be a move towards raising trade barriers generally the economy and there isn’t any sign whatsoever that Obama is seeking to do this. There is probably a reasonable case to be made for restricting stimulus spending to domestic companies since stimulating domestic demand is after all the goal. However if other countries also pursue a fiscal stimulus and restrict where the money can go that would reduce efficiency. The best solution is probably a co-ordinated stimulus across many countries without any national restrictions on using the money. So a US stimulus would partly help Canada and a Canadian stimulus would partly help the US but procurement is carried out in the most efficient manner. ---
**Author:** ![Bookkeeper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bookkeeper/32/281_2.png) [@Bookkeeper](https://boards.straightdope.com/u/Bookkeeper)\ **Post date:** [January 30, 2009, 6:21pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/18 "2009-01-30T18:21:36Z")
Will this actually reduce steel imports from Canada, or will it merely increase the paperwork at the US end as industries will now need to add documentation and controls to make sure that the US steel goes to “stimulus” projects and Canadian steel goes to “non-stimulus” projects and never the twain shall meet? (I assume that the stuff carries an indelible marking that identifies which is which.) ---
**Author:** ![cocopuffed](https://avatars.discourse-cdn.com/v4/letter/c/ac91a4/32.png) [@cocopuffed](https://boards.straightdope.com/u/cocopuffed)\ **Post date:** [January 30, 2009, 6:44pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/19 "2009-01-30T18:44:05Z")
not protectionist enough. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [January 30, 2009, 7:11pm UTC](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655/20 "2009-01-30T19:11:20Z")
> [@Bookkeeper](#): > > Will this actually reduce steel imports from Canada, or will it merely increase the paperwork at the US end as industries will now need to add documentation and controls to make sure that the US steel goes to “stimulus” projects and Canadian steel goes to “non-stimulus” projects and never the twain shall meet? (I assume that the stuff carries an indelible marking that identifies which is which.) Generally, no. Structural steel is usually marked with job and section numbers and such after it’s cut and detailed, but not with “Made in the USA” marks. Steel is usually traceable through the heat number - the lot number assigned to the steel when it’s made - and its Material Test Report. The country of origin, though, would usually be on an MTR document, separate from the steel itself. Mixing the two would be easy if you wanted to (and can happen even if you don’t want it to.) [Next page](https://boards.straightdope.com/t/just-how-protectionist-is-president-obama/483655.md?page=2)