711.942/243: Telegram

The Acting Secretary of State to the Chargé in the United Kingdom ( Johnson )

675. Your 1178, August 17, 4 p.m. The Department greatly appreciates receiving your report of the statement of the head of the Far Eastern Department of the British Foreign Office in regard to Japanese reaction to the notification by this Government of desire to terminate its commercial treaty with Japan and in regard to the views of the Foreign Office as to possible termination by the British Government of its commercial treaty with Japan.

The Department offers for your guidance in discussing this subject with officials of the Foreign Office observations as follows:

Our estimate of the Japanese reaction is in general agreement with that of the Foreign Office as outlined in your numbered paragraph 1. Our conclusions are based upon indications that some effort is now being made by the Japanese authorities in China to avoid the giving of cause for the further arousing of American public opinion against Japan so far as this can be accomplished without deviation from the essential objectives of Japanese policy.

On July 31 in reply to an inquiry by the Japanese Ambassador as to what this Government had in mind in regard to negotiating a new treaty the Secretary replied that he did not believe that he could add anything to what he had said in reply to inquiries made by press correspondents; that as the Secretary had indicated to the correspondents this Government’s note was couched in well understood and established terms; that the note might best be allowed to speak for itself and that the entire question pertaining to a new agreement depended upon future developments. No further statement has been made.

With reference to the suggestion contained in your telegram that the Japanese are afraid that the United States, in negotiating a new treaty, will insist on the disappearance of the most-favored nation clause in order that the United States might be free to impose countervailing duties, it may be observed that the United States has never considered the most-favored-nation clause in our treaties to be a bar to the imposition of countervailing duties; such duties are imposed not because of the national origins of the goods to which they are applied but because of the payment or bestowal of bounties or grants upon such goods in the country of their production.