Problems with the Bay Bridge demonstrate why "you always pay for a shortcut in the long run."

Posted by scapozzola on 03/15/2012

The Oakland-Bay Bridge currently under construction in San Francisco is being made in China.

Even though U.S. firms wanted to supply the steel needed for the Bay Bridge, California officials chose to hire a Chinese company, Shanghai Zhenhua Heavy Industries.

While the Chinese firm was the lowest bidder, California taxpayers are now paying extra because the imported steel girders proved to be faulty.  As the San Francisco Chronicle has reported, construction of the Bay Bridge has been plagued by delays and cost overruns due to the flawed steel sections imported from China. 

In order to undercut U.S. producers, China’s central government provides its state-owned enterprises, like Shanghai Zhenhua, with massive subsidies.  These subsidies are actionable under world trade law.  China also continues to undervalue its currency, the Yuan, in order to artificially lower export costs.  This currency manipulation violates the commitments that China made when it joined the World Trade Organization (WTO).

When Shanghai Zhenhua offered the lowest bid for the Bay Bridge, they were able to do so because of these practices, which violate world trade law. 

America’s steelmakers utilize the most modern, computerized facilities in the world to produce safe, high quality steel.  As the National Steel Bridge Alliance (NSBA) has pointed out, U.S. firms did indeed stand ready to supply the steel needed for the Bay Bridge.

The cost overruns resulting from Shanghai Zhenhua’s unsafe steel could have been avoided if California had simply chosen to use reliable, American-made steel

The United States needs to repair a lot of crumbling infrastructure.  If U.S. tax dollars are spent domestically to upgrade aging roads, bridges, and waterworks, they can support America’s manufacturers and their workers.

Read more about the common sense economics of "Buy America" preferences.

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