An economic stimulus package going through the U.S. Congress has provisions that could start a trade war and fails to address U.S. competitiveness, Dell's chairman and CEO said Tuesday.
A provision requiring projects funded by the stimulus package to use U.S.-made equipment and materials could prompt complaints to the World Trade Organization and could lead other countries to erect trade barriers on U.S. products, said Michael Dell. "You run the risk of protectionism," Dell said at a Northern Virginia Technology Council event. "Trade wars are very, very dangerous, particularly in the economic situation we find ourselves in right now."
Many Democrats have defended the "buy American" provisions in the Senate's US$890 billion stimulus bill, which would require that all materials and equipment used in projects funded by the bill be made in the U.S., with an exception when the U.S. materials would drive up the project's cost by more than 25 percent. The provision will benefit U.S. industries, said Senator Byron Dorgan, a North Dakota Democrat and author of the provision.
"If we want to stimulate the American economy and create new jobs here, we ought to be investing in American-made products with the stimulus money," Dorgan wrote in a USA Today opinion article. "If the goal of the economic recovery plan is to create American jobs, then it stands to reason that the Buy American provision is essential. My language simply says that any public works or public building projects -- such as roads, bridges, tunnels or schools -- funded by the stimulus bill should be built with American-made steel, iron and other manufactured goods."
Dell also told his audience that another major concern he has with the stimulus package is that it largely fails to address U.S. competitiveness with the rest of the world. Congress should focus more on improving the U.S. education system, cutting corporate tax rates and allowing U.S. companies to hire foreign workers, he said. The House of Representatives version of the stimulus package does include $41 billion for school districts, including money to repair schools and install computers.
Dell and several other large tech companies have argued that the U.S. should allow more foreign workers to be hired each year. However, the company announced the layoffs of about 1,900 workers in Ireland earlier this month while it shifts European manufacturing to Poland.
"The one word that is missing from this is competitiveness," Dell said of the stimulus plan. "To me, that's a really big issue. If we're not competitive, we've only put a band-aid on the problem."
However, some parts of the stimulus package are on target, Dell added. The tech provisions, including $6 billion for broadband deployment, are needed because the U.S. is falling behind other countries' broadband capabilities, he said. Several nations in East Asia have fiber-based broadband covering their countries, Dell said.
"We need fiber to the home," he said. "That's what everyone will realize that broadband is."