But what action? First, we must inquire how many Americans are affected in their livelihoods by imports against which they might seem to require protection. Dr. Howard S. Piquet, an eminent scholar and long the chief of the Economics Division of the U.S. Tariff Commission, commented on this in a report made to a government commission: Suppose, he said, that we abolished all our tariff duties and went in for complete free trade. How many Americans would lose their jobs? About 400,000.
Compare that figure with the number of Americans earning their livelihoods in our foreign trade—exports and imports. Secretary of Commerce Sinclair Weeks, who has no great reputation as an "internationalistic, starry-eyed idealist," sets this total at 4,500,000.
Americans profiting from foreign trade thus outnumber Americans injured by imports by more than ten to one. That is, the injured Americans are relatively a small minority. Surely, though, we cannot simply throw this group on the waste heap. They have to have some sort of protection —or rescue. What sort? Senator Paul H. Douglas sees a good sort of rescue in the policies of the European Coal and Steel Community. That community consists of six countries: Italy, France, West Germany, the Netherlands, Belgium, Luxembourg. They have abolished, or are engaged in abolishing, all coal and steel duties at their borders. They envision a great ultimate advantage to themselves through the establishment of a larger and stronger coal and steel common market. But they also have established a fund to compensate firms and workers that may have been damaged by tariff duty elimination.
Accordingly, Senator Douglas suggests that if an American firm can prove to the U.S. Tariff Commission that it is truly imperiled by imports, then loans, grants and technical assistance should be given to the firm to enable it to diversify its output and shift into products more capable of meeting foreign competition. Several bills to this effect have been introduced into Congress.
In some cases a certain amount of protection might still be necessary. The Trade Agreements Act, to meet that contingency, contains an "escape clause." An American industry which considers itself injured may appeal to the U.S. Tariff Commission. The Commission makes an inquiry and transmits a report to the President. The President makes the final decision. Why the President? Because the President, under the Constitution, is in immediate charge of the conduct of our foreign affairs. Because every change in our tariff
duties and import quotas has important consequences among our friends, our allies, our potential allies. Because the President knows the complexities of our foreign relationships better than the Tariff Commission or Congress. Because he is in the best position to weigh the particular needs of an individual American industry against the general needs of the whole free world.
The President declined, for instance, to grant increased protection to our ground-fish industry a year and a half ago. Iceland sells us large quantities of ground-fish. The British had deliberately reduced their purchases of Icelandic ground-fish. The Soviet Union was striving strenuously to enlarge its purchases of Icelandic products and thus to enlarge its influence in Icelandic politics. The United States has a valuable military base in Iceland. Loss of that base would be highly damaging to the military defense of the free world. So: no increased protection for the U.S. ground-fish industry.
The Trade Agreements Act contains another protectionist possibility. If an American industry can persuade our Office of Defense Mobilization that its product is "essential" to national defense, ODM will transmit the industry's claim for increased protection to the President. Among the products requiring skills that ODM has been told are "essential" to national defense are: clinical thermometers, photographic shutters, wool felt, wooden boats, clocks, twine. If these industries are "essential" to national defense, what industries are not? ODM has had a tough time investigating these claims. It came to a clear decision, however, in the case of the domestic petroleum industry. Imports of foreign petroleum are now limited by a so-called "voluntary plan" accepted by our importing companies. Thereupon Canada, which exports oil to our Pacific Coast, denounced us. She was already angry because of our methods of disposing of surplus agricultural commodities abroad—with governmental help from our Commodity Credit Corporation and Department of Agriculture. Among these commodities is wheat. Canada is a large exporter of wheat. She claims, with much justice, that our artificial government-sponsored exports of wheat have seriously interfered with her normal wheat export trade.