FIGHTING TARIFFS IN THE RING
AFTER WEEKS OF VERBAL TILTING, our tariff war with France has started. No matter how the matter may be smoothed over eventually by the diplomats, we have met the application of maximum duties on American exports to France by hoisting up in equal measure the duties on corresponding goods sent from France to America. And so the war is on, with some correspondents abroad looking for a general European attack on American protective tariffs, and with press writers in this country predicting that the row with France will be reechoed in Congress by the Democrats and low-tariff advocates.
One thing is found absolutely certain by a Consolidated Press correspondent in Washington—"the tariff will be strenuously injected into the coming Presidential campaign." J. F. Essary of the Baltimore Sun agrees that our high-tariff policy is being directly challenged at home, and he quotes Representative Cordell Hull (Dem. of Tenn.), who assails our tariff system as one which " short-sightedly leads the nations of the world in the adoption of prohibitive duties, surrounded by a network of discriminations, restrictions, embargoes, retaliations, and boycotts." Coming back to the international angle we find Mr. Edwin L. James of the New York Times writing from Paris that "there is not a country in Europe which is not following closely the French effort to pierce a hole in the American tariff wall."
Naturally, our Government's position finds strong defenders. The New York American calls upon the President to use to the full the powers of retaliation conferred by the existing tariff law. "France struck first," declares the Washington Star; "America is justified in resort to defensive measures." The New Haven Register speaks for a number of our dailies in asserting that the French levy of maximum tariffs against Americans goods, while the Germans, by virtue of a special trade treaty, receive the minimum rates, "is discrimination plain and simple."
But others think that France is just giving us a taste of our own medicine. America, says the Kansas City Star, "can not expect to raise a high-tariff wall without provoking retaliatory measures abroad." The strange logic of the official American insistence on uniform tariff rates, as the Norfolk Virginian-Pilot sees it, is that—
"The highest tariff in American history, designed to exclude European industry from the American market, is in virtue of its uniform application to all countries made the basis of a demand for the lowest foreign duties on American products—even where such duties, as in the case of German imports into France, and Vice versa, are granted in return for special concessions which our own Government would absolutely decline to make."
Looking closely, editors find the dispute over the tariff with France involves certain deep essential differences. It is, in essence, writes Henry Kittredge Norton in the New York Herald Tribune, "a conflict between two antagonistic theories in regard to the use of tariffs." And the New York World offers a careful explanation of the two protective-tariff systems:
"France has a bargaining tariff, with two scales of duties—a maximum and a minimum. The maximum, or general, rates are imposed on the products of countries with which France has no reciprocal trade agreements. The minimum rates are granted in return for tariff favors by other countries. Thus, in the recent Franco-German reciprocity treaty, France gave Germany the benefit of low rates on machinery, electrical supplies, and chemicals, and Germany reciprocated by granting France special rates on wines, soaps, perfumes, and textiles.
"The present American tariff law makes no provision for such reciprocity. It sets up a uniform schedule of rates for all countries and prescribes penalties when a country attempts dumping or unfair discrimination against American trade. It is not a bargaining but a fighting tariff. Now, France has applied her maximum schedule of duties to American imports because we have no trade treaty with her, as Germany has, and our Government has taken the position that the giving of lower rates to Germany than to the United States is unfair discrimination. France has replied that we can get the same sort of favors given to Germany if we are willing to pay for them.
"That is the nub of the controversy. The whole trouble lies in the difference between a bargaining and a fighting tariff."
The status of the Franco-American controversy, as shown by the exchange of recently published notes, is set forth as follows by Albert W. Fox in the Washington Post:
"France demanded assurance from the United States that duties on certain French imports would be lowered if France gave America minimum rates on products affected by the Franco-German pact. America replied, expressing surprize that France should ask a price for refusing to accord most-favored-nation treatment and indirectly threatening retaliation if France continued to discriminate against American goods.
"France now in her latest note suggests an investigation under Section 315 of the American tariff law to ascertain whether or not rates on French goods should be lowered, and expresses readiness, by way of compromise, to consider negotiating a treaty if America 'will not refuse, as it has hitherto done, to examine within the limits of its own legislation the just claims of French exporters.'
"The investigation under Section 315 would determine whether in the eyes of the American Tariff Commission the duties imposed on French goods strike a proper balance between cost of production at home and abroad."
It was also intimated in the French note that the United States might receive some valuable tariff quid pro quo if it would modify certain objectionable regulations, reference being made, in the opinion of the press, to investigation of costs in foreign countries, and the embargoes on certain plants. Two days after the publication of the last French note and before any official reply from Washington, the United States Treasury took a hand in the debate by announcing that collectors had been instructed to impose on a list of French imports increases in duty equal to the increases fixt by France on similar American products on September 6. This action, according to an Associated Press dispatch from Washington, did not Involve Section 317 of the Tariff Act, which provides for retaliatory duties in case of tariff discrimination against the United States, but was taken under specific provisions of the tariff schedules themselves."
Source: The Literary Digest for October 15, 1927