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

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

Washington, May 21, 1957.

SUBJECT

• Tariffs on lead and zinc

At the conclusion of an hour’s session with Governor Adams, Secretary Humphrey and Secretary Seaton, it was decided to proceed with the recommendation for new sliding scale tariffs on lead and zinc. It is planned to present this program to the President during the course of the week and to bring it up for Cabinet discussion on Friday if he approves.

During the discussion it was pointed out that Congress was determined to legislate on this subject at this session regardless of the Administration’s desires. The introduction of this legislation has been held in abeyance with difficulty by the promise that the Administration program would be sent to the Congress promptly. It was further pointed out that the President would not be in a position to veto such legislation unless there was an alternative Administration program providing immediate relief. A new Tariff Commission study would not be sufficient as an alternative.

I pointed out that such action seemed clearly in violation of the spirit of the GATT, if not of its letter. It was pointed out in return that if we should inform the Congress that they could not legislate on this subject because of our obligations under the GATT, this would certainly be a mortal blow to the OTC and probably a mortal blow to next year’s renewal of the Trade Agreement Act. Therefore, it was not deemed practicable to make this argument to the Congress.

There was general consensus that Congress would desire to go considerably beyond the proposition to be submitted by the Interior Department and would only be held within bounds by the prospect of a veto for anything which surpassed the Administration’s recommendations.

I was informed that as a result of my objections at the previous meeting the proposed new tariff on fluorspar had been dropped from the program.

I then objected to the details of the Interior proposal, pointing out that it was proposed to apply the new increases in a manner that seemed too abrupt. I suggested that the additional tariffs be applied in two steps, rather than all at once, using a graduated scale which, in the case of lead, would mean applying half of the additional tariff when the price went below 16 cents, and the remainder when the price went below 15 cents. This in contrast to the Interior proposal to apply the whole additional tariff when the price went below 16 cents. Secretary Seaton agreed to consider this and telephoned me later that the Interior Department would accept this change.

On timing I found that Secretary Seaton thinks he has a commitment to Senator Murray² to send a message to the Congress prior to June 1, and he proposes to brief the Republican leadership on it next week. I pointed out the effect that any such information might have on the Canadian election, and asked that every effort be made to postpone action until at least June 10, the date of the Canadian election, lest it be thought that the U.S. was acting in an unfriendly manner toward the present Canadian Government. Governor Adams was not in the room during this part of the discussion and Secretary Seaton said that he would see what he could do, but he was not hopeful of being able to postpone the matter until June 10th.

Recommendation: (1) In view of the overpowering political arguments in favor of an additional tariff on lead and zinc it is recommended that you accept the proposal of the Interior Department as modified.

(2) That in the Cabinet discussion on Friday you make every effort to delay publication of this report until after the Canadian election on June 10th.³

1. Source: Department of State, Central Files, 411.004/5–2357. Secret.
2. James E. Murray (D–Mont.), Chairman of the Senate Committee on the Interior and Insular Affairs.
3. Secretary Dulles approved both recommendations. The lead and zinc issue was neither formally scheduled nor informally discussed at the Cabinet meeting on Friday, May 24. (Eisenhower Library, Whitman File, Cabinet Meetings)