The Dollar Curtain

While political cartoonists delight in picturing the evils of America's tariff walls, Congress has never seemed to find any interest in lowering them. Within the past few months, however, a number of government commissions have acted to dispel Congressional fears about lowered tariffs. Both the President and leading economists are now pleading for an even more liberal trade policy than the one outlined in the Randall Report. Favoring freer trade are not only the traditional arguments such as lower prices for home consumers, but a present need directly connected to the security of the United States.

One of the most grevious effect of American tariffs is the bitter resentment generated in foreign nations unable to sell their goods here. Restrictions against exporters in Italy, for example, have increased the strength of anti-American groups in that country. Other North Atlantic allies have voiced their dissatisfaction in sharp denunciations of the U. S.'s stringent tariff barriers. As Canada's Prime Minister warned, "We don't want to see the kind of will develop which (U. S.) tariffs inevitably create." So while time and dollars are spent to win friends abroad, the United States is helping defeat its own program by retaining a high tariff wall.

The trade barrier not only weakens the U. S. in the world political situation, but also injures American foreign economic policy in penalizing foreign industrial development. By keeping high duties on processed goods and none on raw materials, the United States relegates these countries to colonial status. As a result, foreign countries have little incentive to develop industrial potentials.

An even greater threat to the United States' economic policy is the lapse in the program for reconstruction of Europe. During the past eight years, the U. S. has given over forty billion dollars in direct aid. This assistance has finally balanced the cost of purchases with the supply of dollars in Europe. But the balance of payments is possible only because foreign countries have deliberately curtailed their purchases of needed materials from the United States. Limiting the intake of necessary items slows the recovery program and results in a lower standard of living, making these nations more vulnerable in their fight against Communist propaganda. What makes the situation particularly dangerous is the impending drop of nearly three and a half billion dollars in aid. In order to keep the dollar gap closed, foreign countries will be forced to increase their restrictions even further. If it were not for the U. S. tariff barriers, Europeans could make up their dollar deficit by selling goods on the American market.

The foreign shortage of dollars caused by these trade blocks also has a dangerous effect on the United States' domestic economy. Since Europe cannot by its usual share of U. S. goods, many American exporters have found their foreign markets shut off, a situation due to get worse with the expected decline in foreign aid. Paul Hoffman, former director of the Marshall Plan, has estimated a five billion dollar annual cut-back in American exports. Dwindling exports mean serious dislocation for the many industries and farmers that are dependent on foreign markets. And with over three million people directly employed in export enterprise, a considerable decrease in American buying power could result, endangering the entire economy.


Tariffs make trouble not only for American foreign policy and domestic stability, but for the general consumer as well. They serve as tools for special lobby factions that work for their own benefits rather than the interests of the nation as a whole. Even groups like the gut string manufacturers have been able to win ridiculous concessions by joining the pressure parade to Washington. Only a sweeping reduction of duties can eliminate the harm that severe trade restrictions are now causing.