Radical Proposal

The automakers, and many other Detroit industries, are protected from foreign competition by tariffs on imported goods. But last week, Detroit's Board of Commerce, whose 6,000 members include many top automakers, made the radical proposal that all U.S. tariffs be abolished, and that there be free trade everywhere. Said the board: the U.S. has reached a stage where the best interests of labor, consumers and industry are not served by high protective tariffs.

The radical proposal was the result of ten years' study of foreign trade, much of it done under the direction of Board President John S. Coleman, president of Burroughs Adding Machine Co., which does business around the world. As the Board's report was issued, Coleman sent a copy of it to President-elect Eisenhower with a note that a "fresh approach must be made" to trade problems to bolster "the strength of the free world."

The Board set forth that "the fathers of the American tariff system never intended that permanent protection for a particular industry should be established. They argued that a tariff wall should . . . protect an industry only during its formative period." American industry, said the Board, has now come of age; it can compete on equal terms with any other nation in the world. Why maintain tariffs?

To the argument that free entry of goods made by "cheap" foreign labor would drag down the American workingman's standard of living, the Board answered: "Foreign labor is not cheap! Productivity as well as wages determine the value of labor. The employees of Detroit and Michigan industries, as a result of heavy investments in equipment, tools and machinery, and improved techniques of production, are competitive with other labor groups throughout the world." Free trade, said the Board, is inevitable. And it is illogical to send American products abroad with loans, grants and outright gifts to buy the goods, and at the same time refuse foreign imports that could well pay for U.S. exports. The U.S. is quickly approaching the position where it will become heavily dependent upon raw materials imported from abroad. Keeping tariffs, the board argued, would only serve to impoverish Americans, lower their standards of living and deplete their natural resources.

Among the tariff changes recommended:

P:Elimination of all quota restrictions on imports, notably in the Defense Production Act of 1951. For example, it restricted importation of various cheeses from European nations at a time when the U.S. cheese industry was selling more cheese to the other nations of the world than the U.S. was importing. This, to the Board, was ample proof the American cheese industry could compete without protective duties or quotas.

P:Repeal of the "Buy American Act," which requires that almost all Government purchases must be made from U.S. firms, regardless of price or quality.

P:Complete revision of U.S. Customs regulations, many of which are unworkable, and so restrictive that they have forced hundreds of legitimate businesses to abandon importing at the very time the U.S. should have been fostering it.

P:Creation of a tax-incentive plan for private investments abroad and elimination of a U.S. tax on income earned abroad if it has already been taxed there.

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