Foreign Relations of the United States, 1955–1957, Foreign Economic Policy; Foreign Information Program, Volume IX

85. Memorandum From the Deputy Under Secretary of State for Economic Affairs (Dillon) to the Secretary of State¹

Washington, May 15, 1957.

SUBJECT

• Proposed new tariffs on lead and zinc

As part of a proposal for a long range minerals program the Department of Interior is recommending additional tariffs on the importation of lead and zinc. This proposal is supported by Secretary Humphrey, and Dr. Hauge feels that some action to restrict imports is necessary, although he does not specifically approve the Interior Department’s proposal.

The Department of Interior desires to send their proposals to the Congress in the immediate future and their report will be under consideration at the White House this week.

Such additional restrictions will have very damaging effect on our relations with Canada, Mexico, Australia, and to a lesser extent, Peru and Belgium. To take action now, as recommended by Interior, without a new study by the Tariff Commission would seem to violate our obligations under GATT, and therefore would seriously weaken our ability to protect the interests of U.S. exporters.

Even if it is decided, as a result of domestic pressure, that some action must be taken to increase tariffs, there is an important question of timing involved. To avoid embarrassment for the Canadian Government no public announcement regarding the possibility of such increases should be made prior to the election on June 10. Any announcement should also be delayed, if at all possible, until after the Buenos Aires Economic Conference in August.²

There is attached as Tab A³ a memorandum more fully treating this subject, which has the concurrence of all the interested bureaus.

Recommendations:

1. It is recommended that you discuss the matter with the President⁴ to determine whether it will be possible to avoid the imposition of additional tariffs on lead, zinc and fluorspar.

2. If, in the light of other Administration responsibilities, additional consideration must be given to the imposition of tariffs, it is recommended that you urge the President (a) to take no action without a new study and investigation by the Tariff Commission, and (b) to avoid any public announcement regarding the possibility of tariff increases until after the Buenos Aires Conference in August.

1. Source: Department of State, Central Files, 811.2543/5–1557. Confidential. C. Douglas Dillon assumed his duties as Deputy Under Secretary on March 15.
2. The Economic Conference of the Organization of American States was scheduled to convene August 15 in Buenos Aires, Argentina. Secretary of the Treasury Robert B. Anderson headed the delegation; Dillon was assigned as his deputy. A list of the entire U.S. Delegation is printed in Department of State Bulletin, August 26, 1957, p. 363. See also vol. VI, pp. 497 ff.
3. Not printed.

4. On May 17, Secretary Dulles discussed import taxes on lead and zinc with President Eisenhower. A memorandum from Dulles’ special assistant Richard D. Drain to Dillon, May 20, contains the following account:

   “I discussed briefly the lead and zinc situation. The President felt we could not continually be refusing any protection without creating such an adverse Congressional sentiment that all our efforts to liberalize trade would be swept aside. I agreed the situation might call for some protective action, but felt strongly we should at first at least get the report from the Tariff Commission. Since this would take more time than the balance of Congress, he could perhaps indicate his willingness to act affirmatively if such a report showed that the present market condition was due to imports.” (Department of State, Central Files, 811.2543/5–2057)