Will Obama and the Democrats lead the U.S. into WWIII?
"Whether the issue was the recent bailout for the American auto industry or provisions favoring U.S. steel producers in the stimulus package now being debated on Capitol Hill, overseas observers warned that any move toward protectionism would have serious consequences for Washington and the rest of the world.
"We must not allow market forces to be completely distorted," Angela Merkel, the German chancellor, warned in a speech on Wednesday. "For instance, I am very wary of seeing subsidies injected into the U.S. auto industry. That could lead to distortion and protectionism."
By the weekend, as word of the "Buy American" proposal spread through Davos, the tone had become sharper.
"It's extremely preoccupying that one of the first acts of the new Obama administration could be a measure that is clearly protectionist and a distortion of competition," said Anne-Marie Idrac, the French trade minister.
She said it was a "very bad sign that goes against" earlier statements opposing protectionism by the leaders of the world's 20 largest economies.
In time of crisis, looking to U.S. with wariness and hope - International Herald Tribune
Protectionism "...makes economic sense for a country only if other countries do not retaliate by imposing protective tariffs themselves. In the 1930s, one of the fundamental causes of the Great Depression was the existence of high protective tariffs in every country, which drastically reduced world trade." protectionism – Dictionary Definition of protectionism | Encyclopedia.com: FREE Online Dictionary
