GE And Caterpillar Square Off Vs. US Steel And Nucor's "Buy American" Initiative

[Brad Kenney]

Big dustup brewing between heavyweights from two of the biggest sectors of the manufacturing economy as they circle each other in the Congress and the court of public opinion.

According to a Bloomberg story last Friday, GE and Caterpillar are arguing that proposals pushed by companies such as U.S. Steel Corp. and Nucor Corp. to limit spending in the stimulus plan to American-made iron and steel run the risk of igniting a trade war.

Here's one side:

“You would be creating an ample basis for countries to close their markets to U.S. products,” said Karan Bhatia, GE’s senior counsel for international law in Washington, in an interview. Fairfield, Connecticut-based GE, the world’s biggest maker of jet engines and locomotives, gets half its sales from outside the U.S.

...and here's the other:

“If American tax dollars are going to be invested, it seems only rational that American products would be favored,” said Terrence Straub, vice president for government relations at U.S. Steel. “The whole intention is to stimulate the creation of American jobs.”

And here I thought GE and Caterpillar were busy competing to see who could lay more workers off in 2009.

Whose side are you on?

[Abogle]

Ignite a trade war? Gimme a break. We are already in a trade war and the US is not winning it. All one needs to look at is the massive and growing trade deficit for the evidence. A so called trade war at this point simply can not hurt us any worse than we already have been. At a time of trade surplus one might make the case that protectionist policies could be harmful, but definitely not so in a time of trade deficit and dimished demand for domestic production

Unilateral "free" trade simply isn't working. Allowing everyone and their brother free access to our markets and technology, without reciprocity can not be anyon'e idea of free trade, nor does it conform to the theories of comparative advantage.

Currency manipulation, lax regulation, export tax credits, VATs, cheap labor, national health care are all unfair advantages practived by our trading partners that we in tern do not employ nor enforce

Little wonder we have a huge sucking sound of jobs, money and technology out of our own country that is in turn used against us by mercantilist countries.

Until the US wises up, institutes a coherent industrial policy like all other industrial nbationas have, starts getting smarter about trade, and starts re-investing in the innovation,technology generating, wealth creating and prosperity sharing engine that manufacturing is we will continue to fall farther and farther behind in the current trade wars.

Little wonder that mutlinationals like GE and CAt who rely heavily on outsoruced production would be against such things. The Chariman of CAT recently said on a national news program that very little produced by CAT in the US is exported, nearly all of their foreing sales are also foreign produced

70% of US exports to china are raw materials and component parts, not finished goods, similar numbers to India as well, while nearly 100% of china's exportsd to the US are finished or value added goods.

[MichaelBP]

Having exported American jobs and technologies, multinational corporations are now engaged in exporting themselves and will in the end operate under the jurisdictions of and be controlled by non-American interests. The escalating depreciation of American equities ensures continuation of this trend into the forseeable future. Impoverishment of the dipossessed employees constituting the electorate of this country will escalate demands on public services which will, in turn, eventually exhaust public treasuries and deligitimize our currency. The ensuing collapse of federal authority will result in devolution to the individual states of that authority and assertion of their political autonomy, which will, in turn be further exploited by multinational oppportunists. Crackpot doomsday scenario? That's the trajectory we're on.