Evening star., 1927-09-18

German goods be suspended until 4
commercial treaty between the United
States and France could be negotiated.
as these negotiations had long been
planned and their beginning was only
a short time off. But France threw
aside this suggestion. proposing. on
the other hand, that here was an en-
cellent chance to do a little bargain.
ing. This process of bargaining is
known in polite society as reciprocity.
| France suggested that if the United
States would accept the principle of
reciprocity upon which to base the
pending commercial treaty, she will,
while the negotiations are going for
ward, lower by so per cent the new
duties on American products. These
| lowered rates, by the way, would still
be double those paid by German ex-
porters to France.
The United States has not vet re.
| piled to this last French proposal, but
, as its tariff policy is not based on the
principle of reciprocity, and as French
exporters now pay minimum duties on
goods shipped to this country, it is
not likely that the reply will be in
the affirmative.
The crux of the situation, boiled
down, comes to this: France believes
she is in a good position to bargain
and holds the whip hand. She has
something definite to offer, which con-
sists in lowering duties on American
goods now shut out by these duties.
She wields a club in an implied threat
to increase other duties, so far un-
touched, and further crowd American
products from the French market.
Holds Tremendous Club.
America, at the same time, can only
| offer to France a guarantee that ex-
listing duties on French imports-not
to be lowered-will not be raised. But
Uncle Sam holds tremendous club
of his own. Section 317 of the tariff
act, which in time may become as well
known as Article X of the League of
Nations covenant, provides that while
tariff duties cannot be lowered. the
President may raise them so per cent
and apply them to a nation which has
Disseminated against the United
States. The presidential order be-
comes effective 80 days after it is pro.
mulgated. This section further pro-
vides that a presidential order may
exclude, wholly or in part the prod
ucts of a nation which has discrimi-
mated against the United States. Sec
ton 317 has never been used, for the
reason that nations with whom the
United States has differed on tariff
matters have realized the fairness of
the American principle and the differ
ences have been peacefully smoothed
away. France is under the impres.
sion that it never will be used. That
may explain her present high-handed
attitude.
hn mir hot hnaorr9nC
therefore, is one which shows France
increasing import duties on American
products, deliberately discriminating
against American products on the
theory that America, forced to bar
gain, will adopt policy of reciprocity.
But if reciprocity is not adopted, and
France remains adamant in her re-
fusal to change her attitude, the only
feasible retaliatory weapon held by
America is the exercise of Section 317.
Bringing it into effect would consti-
tute a real trade war, with time the
only judge of the victor.
1t is interesting to speculate on
who would suffer more if the trade
war now threatened became a fact.
Reduced Volume Seen.
According to Henry Chalmers, chief
Of the division of foreign tariffs of the
Department of Commerce, the first
result to be anticipated by the higher
and discriminatory French duties is
reduced volume of trade between
the United States and France. Mr..
Chalmers points out that while the
changes in the German duties Incl
dental to the Franco-German treaty
do not seem unfavorable to United
States trade, and might improve to
some extent the position Of American
made goods in the German markets,
the changes in French tariff impose
duties on certain lines of Amer
ican goods four times as high as
those applying to competing products
from Germany, England and other
countries.
The American shipments to France
in the lines now subject to these four
fold duties have amounted to we'll
over $10,000,00 in a year, according
to Mr.. Chalmers. The principal
classes of goods affected are electrical
equipment, heavy and light ma
chinery, instruments, hardware and
other metal products, chemicals.
leather, certain textiles, glassware and
range of speciality products. But
this class of goods constitutes only
minor part Of American exports
to France. Fully 70 per cent is made
up of cotton, cereals and petroleum.. 1t
is doubtful if France would raise, for
discriminatory or bargaining purposes,
the duties on any one of these three
classes of products. She needs them
all, and while she might get along
without American cereals and pc
troleum, she could not do without
American cotton. Nor is France the
principal American market for any
| Of these products.
Luxuries Are Imported.
On the other hand. Frances chief
exports to the United States are her
| fine textiles, silk, lingerie, cosmetics,
soap, jeWelry, furs, works Of art and
other such material coming generally
under the head Of luxuries and sold di-
rect to the consumer. Her calf skins
and certain oils, for instance, might
be considered in the light of essential
products, and cutting them off might
result in inconvenience and protest
from some manufacturers and other
| inconveniences until other sources of
supply were developed. But the i'm
portant thing is that France sends
to the United States no products es-
| sential to our industries, and no
basic industry would be seriously
affected by cutting them off. There
might be a silver lining to the
cloud II they were cut off, for
American consumers would probably
find that minus the magic label of
Paris" American.made luxuries are
as luxurious as those made in France
Tactics Of reprisal and trade war.
fare are never undertaken by any
nation without the incentive Of gain,
or unless necessary as a defensive
measure. America, in the present
case, has been undoubtedly placed on
the defensive. The strength of her
trade defenses and her courage to use
Laxaa t1.i.al laos.