One of the more insidious aspects of the "fair trade" and "buy American" sentiments is how they spark tit for tat skirmishes with our trading partners. Over on The Strategic Sourceror a recent post titled "Buy American Update: Canucks Strike Back. Steelers Fight Amongst Themselves" does a good job highlighting one of the many trade spats that result from protectionist policy that prioritizes the needs of the few (e.g., big producers and the unions that work in their facilities) over what's right for the rest of industry. Indeed, while "buy American" might make for good ink from members of the protectionist press -- not to mention additional campaign contributions from unions and executives -- I believe it represents the start of a downward import/export policy spiral where the winners are few and the losers abound.
The post sites an article from American Metal Market that suggests "Canadian municipalities took steps to encourage retaliation while constituents of the US steel industry feuded over the provisions' "clarity" in a recent steel dispute. In short, "it seems that Canada would like to end protective policies on both sides of the border but is more than willing to engage the US in a trade war". As will many other of our trading partners if our fearless leaders in Washington keep listening to the moans and groans of campaign contributors above the real needs of their larger constituency. As we learned from the Great Depression -- or at least some of us did -- there are no winners when trade wars ensue. They prolong the pain for the many and benefit the few.