The Challenge of the Tariff

We declare war upon you--excuse me for using such an expression--in the peaceful field of trade . . . We are relentless in this, and it will prove the superiority of our system.

--Nikita Khrushchev to William Randolph Hearst Jr. (1957)

To Capitol Hill last week President Eisenhower sent what may be 1958's most important--and most fiercely contested--Administration proposal. Due to expire on June 30 is the reciprocal trade act (real name: Trade Agreements Act), the charter under which the executive branch occasionally makes moderate cuts in U.S. tariffs if other countries make cuts in their tariffs on U.S. imports. The President asked Congress to: 1) extend the act for "a minimum" of five years instead of the usual three, 2) grant him the authority to cut tariffs as much as 10% a year--but not more than 25% over the five-year period.

Passage of the bill without laming amendments, said the President, "is a must . . . essential to enable us to meet the latest form of economic challenge to the free world presented by Communism." But his request is likely to meet even rougher congressional opposition than the 1955 reciprocal trade bill, which escaped emasculation-by-amendment in the House by a single vote.

Since 1955 increased competition from abroad has spurred tariff lobbying, the traditionally free-trade South has become increasingly protective about its new industry, and recent signs of recession in an election year have made all Congressmen sensitive to claims that imports are throwing U.S. citizens out of work; the high-tariff camp never mentions that 4,500,000 U.S. citizens earn their living from foreign trade. Looking for a Republican member of the House Ways and Means Committee to co-sponsor the Administration bill, the White House had to reach past three ardent Republican protectionists--New York's Daniel Reed. Ohio's Thomas Jenkins, Pennsylvania's Richard Simpson--to trap the fourth-ranking Republican, New Jersey's Robert Kean, and he was far from eager.

But on the floor of the Senate this week, Ike's endangered bill got a sturdy boost from Illinois' Democrat Paul Douglas, who brought back from a recent fact-finding tour of Western Europe new reasons why the U.S. should push for freer trade. Douglas' key points:

1) Russia's Sputniks, as evidences of technological and industrial prowess, nudged Western Europe toward neutralism. To combat neutralism the U.S. must show Europe economic and political leadership. With leadership urgently needed, it would be "national folly" for the U.S. to retreat toward protectionism.

2) Six European nations (France, West Germany, Italy, Belgium, The Netherlands, Luxembourg) have set out to create a common market that will whittle away tariffs among themselves and build up joint tariff fences against outside countries. Unless it strives to work out tariff-paring agreements with this community-in-the-making, the U.S. will find itself fenced out of a market that now buys 17% of the U.S.'s total exports.

More practical than Douglas' speech was a piece of blunt advice relayed to Ike from Capitol Hill Democratic leaders: the President ought to set aside two 15-minute periods a week for talking to individual Republicans, face to face or by telephone, to jack up congressional support in his own party for reciprocal trade.

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