United States Commercial Policy
IN THIS chapter we shall be concerned with the development of those policies of the United States government which directly affected this country's foreign trade in goods and services during the interwar period. These policies include tariffs, agricultural policies, shipping policies, and cartel policies. Our purpose is not to provide a comprehensive review of United States commercial policy, but rather to present a broad outline of its development as a background for the emerging policies of the present era. As we shall see in later chapters, present American commercial policies and programs do not present a consistent pattern. While they have been influenced by the foreign economic and political conditions and requirements of the present, they are closely linked with the past. For the most part, the commercial policies of the interwar period were developed to meet the needs and interests of the American economy and of the special interests powerful enough to make their demands felt. These policies were a reflection of the prevailing political isolationism, and economic isolationism gave way to internationalism only to the extent that America was convinced that her own economic interests could be better served in the latter direction. Thus, for example, the reversal of America's high-tariff policy came with the realization that exports could be expanded by a reduction in duties on a reciprocal basis and not because of any general appreciation of the relationship of the American balance of payments to the health of the world economy. Although this country is presently negotiating reductions in its tariffs on the basis of the reciprocity provisions of the 1934 law, the administration's motive for tariff reduction lies perhaps less in the desire to gain concessions from foreign countries (since these concessions are frequently nullified by quantitative restrictions necessitated by balance-of-payments disequilibrium) than in the desire to employ a legal means of reducing our own tariffs in order to accomplish broad international-policy objectives. In addition, the operation of the most-favored-nation principle in our reciprocal tariff agreements makes possible an expansion of trade among other countries.