Could "Buy American" Rule Spark Trade War?

Some Businesses Fear Clause In Economic Stimulus Package Could Hurt Their Exports

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Now they're dipping into savings, delaying retirement, cutting back on everything from food to the collection plate at church. Jeremy Davis, a cold saw operator, was making $87,000 a year.

"It's bad. You've set your bills. You've set your lifestyle around what you're making," Davis said. "And so when it's cut in half, you know, first thing you have to do is start asking yourself, you know, where can I make cuts? We don't go out to eat no more. You know, we cook at home. We eat peanut butter and jelly and ham sandwiches for lunch."

"As opposed to the caviar you were eating before," Stahl joked.

"Exactly. No, we was eating turkey," Davis replied.

In pep talks, the employees keep asking their boss, CEO DiMicco: when will the tough times end?

"A lot depends on the stimulus package," DiMicco told Stahl with a sigh. "And I hate to rely on the government to do these things for us. But the reality is that bad and we have no choice."

It's not the first time steel has turned to Washington. A decade ago the industry was on its knees, with competition from cheap imports and unsustainable retirement costs. For every steelmaker on the job, the company had to pay six to eight retired workers. The industry begged for a bailout.

"But whatever you were asking for, Washington said no. And the industry collapsed, practically," Stahl remarked.

"We had 32 steel companies, 32 in this country, go into bankruptcy. You're talking in excess of 100,000 jobs disappearing," DiMicco said.

Under bankruptcy, the companies shed their health care and retirement obligations. The industry bounced back because of consolidations, automation, and China.

"I would definitely say that the fact that the infrastructure was growing at the rate that it was growing in China and around the world, because of that we had four or five really good years," DiMicco explained.

But now steel is at the mercy of Washington again. DiMicco lobbied hard and passionately for the "buy American" clause in the stimulus package. "What we're saying is, 'Listen, yes 'buy American' benefits the steel industry in the United States. Absolutely.' But what we're saying also is might that concept not also benefit the U.S. economic engine, get it started again," he said.