Monday, November 28, 2016

Will “Buy American” Infrastructure Legislation Launch US/Canada Trade War?

President Elect Trump’s sentiment favoring the preservation and repatriation of U. S. manufacturing jobs at all costs, coupled with growing protectionist sentiment among Democratic leaders in Congress, could result in U. S. motorists and taxpayers getting far less infrastructure actually built under any 10 year federal infrastructure legislation likely to be introduced during a Trump administration’s first term. Ohio Congressman and minority leader candidate Tim Ryan is already a chief cheerleader for the expected “Buy American” riders Congress is likely to add to any Trump administration infrastructure proposals. “Let’s have Buy American provisions in there, so it’s American-made steel and American-made concrete,” Ryan has announced.

Former George W. Bush administration trade representative Susan Schwab says the addition of buy American riders to an infrastructure bill will end up with the federal government spending an extra $900,000.00 for every U. S. steel industry job saved, instead of leaving motor fuel tax revenues in the Highway Trust Fund to build more roads and bridges using American construction workers. Buy American steel provisions hurt U. S. trade relations with Canada under the Obama administration, and the addition of concrete to such legislation would further increase material prices by limiting imports of Portland cement from Mexican and South American suppliers who are major exporters to the U. S. construction market.

Toronto based IPEX Management Inc., a steel product maker with plants in both Canada and the U. S., cites difficulties arising at U. S. military and other construction sites under the Obama buy American restrictions. IPEX’s Veso Sobot says multiple projects have suffered schedule delays and increased costs as a result, hurting workers on both sides of the U. S./Canadian border. “Canada is joined at the hip with America. We get 95% of our raw materials from the U. S. We have a lot of American suppliers. We have a lot of American customers. We share so many things,” Sobot said.

It remains to be seen what specific materials may be included in buy American riders to a Trump administration infrastructure bill, and what the impact on material costs for private construction projects in this country might be.

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