The U.S. Chamber of Commerce released a study this week that estimated the economic cost — particularly in lost American jobs — resulting from “Buy American” rules in the stimulus bill, failure to approve pending trade agreements, and the United States’ refusal to fully implement cross-border trucking with Mexico.
The study found that the last of these has resulted in $2.2 billion higher costs for U.S. families and companies, $2.6 billion in lost U.S. exports and more than 25,000 lost jobs for American workers.
“The U.S. has refused to keep its word to Mexico,” says Thomas Donohue, U.S. Chamber president and chief executive officer. “How can we call on other countries to meet their obligations under trade agreements if we refuse to meet our own?”
The study, “Trade Action — or Inaction: The Cost for American Workers and Companies,” calculated costs to American consumers based on Mexico’s retaliatory tariffs ($421 million since implementation in March), continuation of drayage services at the border ($2.6 billion yearly) and loss of 26,500 jobs due to the reduction in exports to the country.
“Half a million American jobs are at risk if the U.S. fails to move forward on trade,” says Donohue, while unveiling the study Tuesday, Sept. 15, before more than 300 small business exporters at the Michigan Chamber of Commerce. “We need to jumpstart America’s export economy because we can’t rely on consumer spending, business investment or ballooning government expenditures to drive our recovery.”
The study found the United States could suffer a net loss of more than 380,000 jobs and $40 billion in lost export sales if it fails to implement its pending trade agreements with Colombia and Korea while the European Union and Canada move ahead with their own agreements with the two countries.
The study also found that while “Buy American” rules in the Recovery Act will create a limited number of U.S. jobs, the gains will evaporate quickly if other countries implement “buy national” policies in their own stimulus programs. If foreign governments lock U.S. companies out of just one percent of this total spending, the net U.S. job loss could surpass 170,000, according to the study.