An organization representing US companies in Asia warned “Buy American”-type policies could spark retaliation from other countries and undermine global trade.
The Asia-Pacific Council of American Chambers of Commerce, which represents more than 10,000 US businesses, urged the government to avoid protectionism and move toward expanding trade agreements with Asia.
The House of Representatives sought to include a provision in a US$787 billion stimulus package that required firms receiving stimulus money to buy US products such as iron, steel and manufactured goods. But the final version passed by the Senate in February acknowledged US obligations to avoid protectionist trade policies under international treaties.
“The temptation is to adopt protectionist policies, but it’s self-defeating,” said Kristin Paulson, the council’s chairperson. “Anything called ‘Buy American’ is not good for trade.”
Paulson said she was not aware that any Asian government had recently boosted barriers to trade.
The council is also lobbying Congress to lower taxes for Americans living abroad.
“They created a disincentive to hire Americans abroad,” Paulson said. “Many Americans are finding it very difficult to stay in many markets.
“We hope we can persuade the tax-writing committees in Congress to reverse these changes,” she said.
The US is the only developed country that taxes its citizens for income earned abroad, Paulson said.