Obama, Summers Speak Out Against ‘Buy American’

President Obama has come out against a Buy American provision that would require stimulus-funded projects to use U.S.-made materials.

“I think that would be a mistake right now,” Obama said on ABC News on Tuesday. “That is a potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe.”

The president added that the United States “can’t send a protectionist message.”

The provision has support among labor unions and Congressional Democrats, including Senate Majority Leader Harry Reid (D-Nev.). The House version, introduced by Rep. Pete Visclosky (D-Ind.), would require that stimulus-funded infrastructure projects use mostly U.S. iron and steel. The Senate version goes further by requiring the use of U.S.-made manufacturing goods in stimulus projects.

But free trade proponents and European nations have been critical of the Buy American clause, saying that it would stifle the flow of goods and perhaps set off a trade war.

The Obama administration, including top advisers who had championed free trade when they worked in the Clinton administration, had been quiet over the Buy American provision until this week.

Lawrence Summers, a top Obama economic aide and the former Treasury secretary under President Clinton, told reporters Tuesday that though Obama wants a stimulus that supports the U.S. economy, “this bill is not going to be an excuse for America breaking its international commitments or embracing any new kind of protectionism.”