“Buy American” sounds patriotic, but reality is not so simple
The 2,000 steelworkers idled at U.S. Steel’s Granite City Works since late last year have become the face of the decline of U.S. manufacturing.
Hundreds of them rallied Tuesday on a blustery morning at the Port Authority at the River’s Edge in Granite City. The backdrop: Steel pipe imported from India for TransCanada’s pipeline bringing crude oil from Alberta to the Wood River refinery complex. The message: “Buy American.”
The plight of U.S. workers employed in manufacturing jobs is real and wrenching to many families, particularly in places like Granite City, where economies are defined by the footprint of big employers.
Since 2000, nearly one in four manufacturing jobs in the United States has disappeared; about 1.5 million manufacturing jobs have vanished since the recession began in December 2007.
Global competition is cutthroat. It is driven by the lowest possible costs using cheap labor and subsidies from foreign governments, including in India and China. U.S.-made steel is high quality, but factory owners here must pay higher U.S. wages and compete without government subsidies.
Trade in a global market for steel and other manufacturing materials defies simple analysis. Connecting the dots is harder than it looks.
Take TransCanada’s Keystone oil pipeline for example. It’s a three-year, $5.2 billion project with ConocoPhillips that eventually will run 2,150 miles from oil fields in Alberta to a facility in Patoka, Ill., in Marion County.
The U.S. Steel Granite City Works doesn’t produce the 30-inch diameter pipe that TransCanada is using. So no jobs there.
Meanwhile, the pipeline job is employing 1,300 construction workers in 10 Missouri counties and four Illinois counties. Most of that construction will be done by union labor.
Also, TransCanada is using 12 pipe suppliers, four from the United States and two from Canada. The orders were made three years ago, when the U.S. steel industry was near capacity and the world economy was growing.
President Barack Obama recently criticized protectionism and countries trying to make it alone, a disunity that fueled economic collapse during the Great Depression. In 1930, Congress adopted the Smoot-Hawley Tariff Act, which increased duties on imported goods to protect American jobs. It backfired, helping to bring on the Great Depression.
Still, the “Buy American” slogan is popular with a whip-sawed and disoriented American work force. The idea has merit for individual shoppers. What products and brands we choose to buy can make a difference, even in macro world. But government regulation of private enterprises in a global market is a very slippery slope.
Job growth is central to restoring America’s economic stability. Yet Congress must resist pure protectionism that would provoke other countries to block U.S. products in retaliation. When the United States denied Mexican commercial trucks from being driven on U.S. soil, the Mexican government increased tariffs on American products.
The United States is the world’s biggest exporter. Private U.S. manufacturers, however, face many disadvantages in a global market in which low costs triumph.
The Granite City plant closed for the first time in 130 years, and it must reopen for the city to recover. But “Buy American” restrictions on TransCanada’s pipeline would not have solved its problem. Simplistic solutions to complex problems rarely work and serve only to raise false hope.
Gilbert Bailon has been editor of the P-D editorial pages since November 2007. Previously, he worked as a reporter, editor and executive editor for The Dallas Morning News and its daily Spanish-language newspaper, Al Dia. He still harbors a passion for all things Tex-Mex: food, music, language, boots and border culture. And yes he has found some of that in the Midwest. 
Would someone tell me why most Obama bumper stickers are on foreign cars when they are the party of American unions?
A CENTRIST - I noticed the same thing!
This is no longer about unions, it is about our government, both parties included, selling out our country. Free trade is a noble concept, but it must also be fair and the system we have now is not fair. Countries subsidize their steel, autos, etc.and dump goods here for less than our companies can match, putting our workers on the dole. The final nail in our industrial coffin will be cap and tax. If we unilaterally move to this destructive policy and allow China and India to continue unabated, we are dead meat. We cannot survive selling each other pizzas and suing when we slip and fall. If we no longer make anything we might as well give up. I am afraid “free trade” is just another ruse (like cap and tax) to redistribute our wealth to other countries. Our workers are not going to stand for this and either party that moves in the wrong direction will suffer a backlash. Our workers do not want welfare, they want jobs and they are not willing to wait for imaginary “green jobs” that will end up going to the lowest bidder anyway.
Get used to the idea that foreign countries can produce goods and services on the international market cheaper than we can. We voted for that, and now we don’t like it. Get real.
Steel? Pittsburgh steel workers endorsed Geo. Bush. The Union was some 700 strong. Upon his election, Bush put a quasi tariff on some steel imports including Tin. The steelworkers jobs were saved, temporarily.
Unfortunately for the Maui Land and Pineapple company union workers the price of tin went up and it was no longer economically feasible to grow and can pineapple in Hawaii. The plantation closed,eliminating over 2000 union jobs.
Now, at that point Maui Land and Pineapple contracted with Taiwan to grow and can pineapple using Maui’s labeling. Maui Land an Pine benefited from Geo Bush’s unwise decision.
To get into steel pipe for pipelines is another bag of worms, but in a special category. It’s too involved to explain in this forum.
When will I finally see the guilty party blamed, THE PEABRAIN AMERICAN CONSUMER.
Editors - I am not getting an answer to my question. Isn’t this supposed to be a conversation? What do you all drive? Let me quess, Hondas and Toyatas? Why? Why is no one answering my question? Why don’t you all drive American cars? Ford Fusions are supposed to get 4l mpg. Hello? EJRohert, Garrison, Tim Hogan, I know you are there.
Centist,
Perhaps another question is why are all those Obama stickers still on all those cars. the election is over and has been over for six months. I was raised in the rough and tumble land of hard ball politics in Madison County. I worked on many campaigns and the rule was always get the signs down the next day. It was considered bad manners to continue to rub it in after you won.
Thank you Gil for being the voice of reason here. These are complex issues, unsolved by unilateral thinking. On the simplest level, we should think of it like this: when we were a leader in the manufacturing world during the industrial revolution, it was because we had the technology market cornered. Now that other countries have caught up to us in that sector, it is time for us to retool and pursue new technology. Fact is, we have a segment of the population satisfied with intellectual stagnation, willing to relegate themselves to doing 20th century jobs in the 21st century. Problem being, there are billions of other people HAPPY to do that job for a fraction of the cost.
I have a challenge for anyone who endorses protectionism. Empty your house of everything imported and refill it with only American products without going broke. Then drive your Ford/Chevy into the creek b/c those “American” companies manufacture their products with loads of imported raw goods, then fuel them foreign petrol.
Point: TRADE IS GOOD! Cooperation with other countries will raise the standard of living across the board.
The folks at these rallies are wearing clothing manufactured in Asia. They are driving cars fueled by oil from Canada, Mexico, or the middle east. Before the rally, they drank coffee which was grown in South America or Africa. And they’ll watch the rally on the evening news, on a television which was produced in Asia or Mexico, sitting on a TV stand made in China.
So what it comes down to is, they don’t want ALL products to be made in America, just the ones which they happen to make.
It’s obvious RyanCarroll paid attention during his Economics class discussion on Comparative Advantage. He proposes a nice challenge for the protectionists. No one will be able to respond to him if they do because the tool they would use to respond with, the computer, would be gone.
I’ll expand on Nick’s thought. Everyone wants everything to be made in America right up to the point where it costs one cent more than that not made here.