WASHINGTON (AFP) — A new "Buy American" push in President Barack Obama's economic stimulus plan is sparking protests about protectionism from US trading partners.
Passage of the 819 billion dollar economic stimulus package Wednesday by the US House of Representatives raised hackles in Europe and Canada, the United States's biggest trading partner.
Obama has pushed for swift passage of the American Recovery and Reinvestment Act as vital to prevent the collapse of the US economy, reeling from the global financial crisis that has thwarted governments' unprecedented actions to ease the turmoil.
The legislation's package of tax cuts and spending has moved to the Senate, where lawmakers are working on their own version of the plan.
The bulk of the bill's spending is aimed at bringing aging infrastructure into the 21st century to preserve and improve the country's long-term competitiveness in the global economy, creating millions of jobs in the process.
The sweep of projects is broad, from roads, rail, bridges, airports and dams to military construction and housing, among others.
The House-approved plan's "Buy American" provision generally prohibits the purchase of foreign iron and steel for any infrastructure project in the bill.
The European Union's trade commissioner, Catherine Ashton, pre-emptively voiced concern about the US measure.
Italian Trade Minister Adolfo Urso warned Monday as the US legislation was being developed: "A dangerous new steel war is looming and we need to counter it with strong and decisive actions."
A European familiar with an EU trade commissioner dinner held the same day said that "one or two delegations signaled that the US recovery package contains seeds of a new steel dispute."
Obama, who criticized international trade agreements, including NAFTA, in his presidential campaign, has wasted no time in taking a tough stance on the trade front since taking office on January 20.
The next day, the Obama administration branded China a currency manipulator, setting the stage for a trade war with the Asian giant which has overtaken Japan as America's biggest foreign creditor.
