Barack Obama found another way to look weak and inexperienced this week, this time on the trade war threatened by the administration’s stimulus package. After pandering to unions by inserting a “Buy American” clause in the gigantic porkfest, Europe and Asia threatened trade sanctions on American companies competing for business in their markets. Obama finally ran up the white flag instead of Old Glory:
The European Union warned the US yesterday against plunging the world into depression by adopting a planned “Buy American” policy, intensifying fears of a trade war.
The EU threatened to retaliate if the US Congress went ahead with sweeping measures in its $800 billion (£554 billion) stimulus plan to restrict spending to American goods and services. …
Last night Mr Obama gave a strong signal that he would remove the most provocative passages from the Bill.
“I agree that we can’t send a protectionist message,” he said in an interview with Fox TV. “I want to see what kind of language we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade.”
Give Obama some credit for coming to his senses, albeit a little late. The protectionist language in the bill locks out foreign suppliers from our infrastructure projects, which sounds great until one realizes that other nations will lock out American companies from their infrastructure projects as well. It’s a replay of the Smoot-Hawley disaster, and it would magnify the current economic crisis immeasurably in touching off a trade war — just as the original Smoot-Hawley did in 1930.
Unfortunately, though, Obama looks less like a leader and more like a man reacting to events. He should have foreseen the consequences of the legislation before pushing it. Now, instead of looking like the leader of the free world, Obama looks like a man flailing in the water, looking for lifelines, without a clue as to how to govern or an understanding of trade or foreign relations. He projects weakness, uncertainty, and inexperience at a time when America can ill afford any of those three, let alone the hat trick.