JAPAN'S REPRISAL.

Auckland Star, Volume LXVII, Issue 149, 25 June 1936, Page 6

JAPAN'S REPRISAL.

The Commonwealth Government's professed belief that the raising of the Australian duties on low-priced foreign textiles would not arouse the Japanese to reprisal has been proved wide of the mark. The belief that Japan, however unwillingly, must continue to buy Australian wool has yet to be tested. Probably the Japanese will be unable to discontinue buying, but they will buy only as much as they must, .and while so doing they will arrange as far as possible to transfer their custom to other countries in future seasons. It is being pointed out in the Australian wool industry, which is justifiably alarmed, that a few years ago many were of the opinion that German and Italian mills could not function without large supplies of Australian wool, but the event proved otherwise. Germany bought less from Australia, and more from Argentina and South Africa. "No cause exists," remarks an Australian wool firm's circular, "to anticipate that reduced Japanese purchasing will not have ill effects on prices."

It seems probable that the Australian Government, in deciding to raise the tariff, calculated the effects of its decision in pounds, shillings and pence, but did not sufficiently consider the effect on Japanese national pride'. In Japan the raising of the tariff is seen as yet another of the obstacles which have been raised in all parts of the world against the nation's trade expansion. The Japanese discern political (and even racial) motives in actions the real motive of which is commercial. No nation dealing with the Japanese can afford to disregard this important element in their thinking. It is idle for the Australian Government to assert that the Japanese are "definitely challenging the right of the Commonwealth to alter its duties." The balance of trade is heavily in favour of Australia, and Australia upset the existing relationship by imposing duties which the | Japanese justifiably regard as discriminatory.