The Press MONDAY, JANUARY 13, 1947. American Tariffs

Press, Volume LXXXIII, Issue 25081, 13 January 1947, Page 6

The Press MONDAY, JANUARY 13, 1947. American Tariffs

In President Truman’s economic review, addressed to Congress, American tariff policy was the subject of some rather nervously guarded references. Having stated the plain fact, that foreign trade could powerfully help to stabilise American prosperity only if the United States were as willing to buy from foreign countries (or to invest in them) as to sell, he added that “indiscriminate reduction of tariff “ barriers must not be contem- “ plated This placatory sentence cast in the direction of the hightariff interests was followed by another: “ For years we cannot expect “to buy as much from abroad as “ others buy from us ”. It is true enough that the world, acutely short of goods, wants to buy in the United States; and many countries that want to buy are not yet in a position to pay with exports. It is also true that the trading capacity of many needs to be built up by capital development. In both ways, then, Mr Truman was warranted in saying that it would be a profitable part of American policy to make loans'and invest capital abroad. But there is not one country, interested either in short-term import credits or in long-term development loans, but will be chilled by Mr Truman’s eagerness to sound a warning against “ indiscriminate ” tariff reduction—a superfluous warning, if ever there was one—and to promise years of freedom from any dreadful surplus of imports; and every such country will wonder what all this bodes for the Geneva conference, called (for April) by the United States, to work out reciprocal tariff concession programmes within the framework of the proposed International Trade Organisation. There is of course an explanation of Mr Truman’s want of positive conviction; of his emphasis on what is not •to be thought of and not to be done rather than on what should be. The Administration’s tariff policy has not changed; it remains, no doubt, genuinely and resolutely a policy of concession to meet, and gain, concession. It is a policy already vindicated, more clearly than is everywhere recognised, and one which the Administration is already empowered to carry further. But Congress can refuse the appropriations necessary to back the Administration’s acts; and the situation in Congress has changed. Tariff policy was not an issue at the November elections. It is also possible to quote Republican leaders in uncompromising support of Mr Cordell Hull’s tariff legislation. It is possible, again, to find not a little evidence of a widespread American revulsion against the high-tariff policy finally embodied in the Hawley-Smoot schedules. But it remains true that the Republican Party is traditionally the high-tariff party, true also that its will and ability to resist certain powerful protectionist lobbies are in doubt, and true, finally, that the Republican majority figures had hardly been hoisted before Senator Butler denounced plans for further tariff reductions as .“ a direct affront to “ the popular will ”. Senator Butler is not the Republican Party, and did not claim to be; but he is not a minority of one in it. It is, however, more significant, or may prove to be, that Senator Vandenberg, the party’s chief exponent of the twoparty line on foreign policy, three weeks ago explained very carefully what the limits of agreement were; and, as one field in which the Administration and the Republicans have worked out no agreed policy and have in fact not tried to reach any, is that of international trade and tariff legislation. There, consequently. the Republican majorities are uncommitted; and there, it may be added, is revealed the fallacy of the commonly asserted and commonly accepted notion that foreign policy does not divide the two parties. The outlook for April cannot be regarded confidently, though it is far too soon to think it hopeless. At best, the difficulties to be overcome by negotiation would be great. American tariffs axe so high that, for example, if preferences were abolished, pro tanto reduction would not be an effective equivalent. Again, the administration of the American tariff, as the Canadians have lately argued with reason, is as illiberal and obstructive as the schedule itself. Yet again, the American case is nearly always presented as if trade “discrimina- “ tion ” were a wholly un-American vice, American reform being called for only in regard to tariff practice; but this is not true—so far from being true that Mr Truman’s references to American lending policy come into question. If he was thinking of Export-Import Bank credits, for instance, he was thinking of the exceedingly vicious discriminatory practice of the tied loan. These are some of the difficulties ahead, in April and beyond. They can all be surmounted. They may all be. But President Truman’s tone suggests that, as he counts heads in Congress now, his courage sipks.