Evening star., 1927-09-18
A Threatened Trade War.

cial treaty went into erect September
s last, new French duties on some
four hundred items of trade also be-
came effective. with the result that
American exporters to France found
themselves confronted with not only
an increased tariff, but tariffs which
were in some cases four times as high
for American.made products as for
the same products sent into France
from Germany. Germany, enjoying a
favored-nation compact with France,
sent in her goods under minimum
duties, while the United States, lack.
ing a commercial treaty. was forced
to pay general and maximum duties.
The result has been a hurried ex-
change Of diplomatic proposals and
counter proposals. made in an effort
to ward off a situation which shows
increasing tendencies Of developing
into a trade war. in which reprisal ts
fought with reprisal, and commerce,
as we'll as good feeling between
friendly nations, suffers as result.
The root Of the whole trouble lies
in the fundamental difference be-
tween the French and the American
viewpoint of the tariff. France cuts
her tariff from the top down. the ex'
tent Of the cutting depending upon
the inducements which can be offered
her through similar cuts on the part
~xvt,t zh
This policy is defined as bargaining,
or reciprocity. America. on the other
hand, fixes its rates of duty from the
bottom. One minimum rate applies
TO all. In its favored.nation CONNER
ciaI treaties, one of which she now has
with Germany, all that 1t can offer
Is a guarantee that the favored nation
will always enjoy minimum rates. 1t
cannot lower these rates unless by an
act Of Congress, for they are fxed
by statute. But in case power de-
liberately discriminates against the
United States. as France has done In
the present instance. Congress placed
q weapon in the hands of the Execu-
tive which permits him to increase by
fifty per cent the duties on products
coming from the nation guilty Of dis.
elimination, or to bar them. in part
or in whole, by presidential decree.
This executive power. derived from
section 317 of the tariff act, has never
been exercised. The serious results
which might follow putting it into
effect may be imagined.
One point in respect to the difficul.
ties over the French tariff should be
kept in mind: The present complica.
tions do not arise from a high tariff.
America. high-tariff nation. would
have no right to complain against a
high tariff. But high tariff which
amounts to discrimination is an alto
eether different thing. American
trade could adjust itself to high
tariff, provided competitors were
treated impartially. But against dis
elimination no industry can survive.
France undoubtedly believes she Is
right. but her logic has a hollow
sound on this side of the water. II
by bargaining with her own duties
she is able to force down American
duties. she shows ordinary business
acumen. But in this case she is at
tempting to bargain with q nation
which cannot bargain in terms Of the
tariff. She is welding a weapon in
imination-virtually placing an
embargo against some American
products in the hope Of accomplish
ing by duress something she would
otherwise be unable to accomplish.
She Is either unfamiliar with the law
in America or she believes that be-
cause section 317 has never been used
1t never will be used. II this trouble
some business develops into a trade
war. America undoubtedly holds the
whip hand. It's economic position 10
more secure, and the nature Of the
commerce between France and the
United States Is more in its favor.
America can do without French
products. France would be hard put
to do without American products.
No one wants a trade war. Com.
throat reprisals are bad tactics. I'm.
doubtedly there are times when they
must be used. In the present case,
France struck first. America is justi,
AAA S.~ Jaf 81,