Barack Obama to dilute 'Buy American' plan after Europe threatens US with trade war
Barack Obama is expected to water down "Buy American" plans in his economic stimulus package after European diplomats privately threatened to launch a trade war in retaliation.
By Tim Shipman in Washington and Philip Sherwell in New York
Published: 7:04PM GMT 31 Jan 2009
The White House has promised to review the protectionist proposals, passed last week by Democratic allies in the House of Representatives, which would ban the use of non-American steel in the $800 billion of construction projects.
Obama officials are under pressure from what European diplomats in Washington describe as a discreet but outspoken campaign of "quiet fury" from America's closest allies.
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European Commission representatives and diplomats from the British, French, Canadian and Mexican embassies in Washington have all launched an intensive lobbying operation to convince senators to strike the provisions from the bill they will debate this week.
A Western diplomat in Washington made clear that otherwise a trade war was in prospect. "The EU has said it will not stand idly by and let this happen. I've not heard words that strong from Brussels in 20 years," the official said.
"This is a very serious situation and there are very strong emotions here pushing for some form of protectionism. The Americans have been made very aware of our concerns and if we need to make things very explicit about what we will do, we will spell things out in words of one syllable.
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/4414202/Barack-Obama-to-dilute-Buy-American-plan-after-Europe-threatens-US-with-trade-war.htmlprotectionism under Roosevelt hurt more the US economy than anything else, but the lesson hasn't been learned...