US Senate drops "Buy American" clause in stimulus

The US senate has voted to water down the "Buy American" clause in the $900 billion (£620 billion) stimulus bill.

The decision came after president Barack Obama expressed concern the original language of the plan could spark a global trade war.

Senators approved the amendment requiring the provisions to be "applied in a manner consistent with US obligations under international agreements".

During a number of TV interviews earlier this week, Mr Obama admitted he was concerned about the original plans.

"I think we need to make sure that any provisions that are in there are not going to trigger a trade war," Mr Obama told ABC.

He also told Fox News: "I think it would be a mistake, though, at a time when worldwide trade is declining for us to start sending a message that somehow we're looking after ourselves and not concerned with world trade."

The new changes mean US trading partners can take comfort in the fact they will be exempted from strict requirements in the bill that all public works projects funded by the stimulus package use only US-made iron, steel and manufactured goods.

US steel companies have campaigned for the "Buy America" clause claiming the taxpayers' money used in the bailout should be used to create American jobs.