President Barack Obama said no to the protectionist side of the massive economic stimulus package. The main condition attached to the government's $800bn (£567bn) bailout is called “Buy America,” which means all the projects financed through that bailout package should buy American iron and steel and may very well mandate American preference for all "manufactured goods".

However, President Obama said this American protectionism would inevitably lead to a trade war with several nations. The President said it would be a wrong step from the United States and underlined the fact that the economic stimulus package must not contain protectionist language.

“We can't send a protectionist message," said Obama in an interview with Fox News. United States’ first black President added that it would be a mistake if America would send the message that it is only looking after itself and is not concerned with the world trade that has been declining. 

"We need to make sure that any provisions that are in there are not going to trigger a trade war," said President Obama in an interview with ABC. He said Tuesday that he wants Congress to change the controversial "Buy American" provision.

The “Buy America” provision is good news for companies producing steel like US Steel first of all because it will help create or save thousands of jobs. Blue-chip companies such as General Electric, Boeing, and Caterpillar oppose it because these companies make much of their profits through exports. Free-traders are also vexed by the "Buy America" provision.

The problem with this "Buy America" provision is that, if it extends to become a preference for only American-produced goods, it will trigger a backlash from Canada to the EU to the WTO, which will also implement protectionist measures and nobody wants a trade war.