43. Letter From the Secretary of State to the President1
Dear Mr. President: The Department of State has considered the recommendation of the Tariff Commission that the duty on bicycles, both lightweight and heavyweight, be increased.
The foreign manufacturers of lightweight bicycles believe, with considerable basis, that they have not taken a market away from the American bicycle manufacturers but have developed a new market. They and their governments argue that this is typically a case when duties should not be raised to cancel out resourcefulness and inventiveness. They feel that, under these circumstances, an increase of duty must be interpreted as essentially a determination to follow a protectionist policy without regard to the equities of particular situations.
It is our opinion that, under these circumstances, an increase of duty on lightweight bicycles will be taken abroad as indicative of a protectionist trend in the United States and will provide a new argument for those in other countries who seek higher tariffs as against those who are seeking to reduce trade barriers.
In the case of the heavyweight bicycles, the same argument cannot be made. However, we should note that the principal exporter to the United States of heavy bicycles is the Federal Republic of Germany which the United States is now pressing for a reduction of duties on United States agricultural products. We feel that this effort has a good chance of success, although we cannot be certain of success. We do, however, feel that failure is almost certain at this time if the duty on heavy bicycles is increased.
Quite apart from this particular effort, we agree generally with the views expressed by Secretary Benson in his letter to you of July [Page 143] 11, 1955,2 that an upward adjustment in bicycle tariffs at this time would seriously impede our efforts to obtain liberalization of existing restrictions against imports of agricultural products into the countries which now manufacture and export bicycles to the United States, notably the United Kingdom, West Germany and France.
It should perhaps be noted that the United Kingdom, which is the principal exporter of bicycles to the United States, imports from the United States approximately $800,000,000 worth of goods a year, whereas it exports to the United States only about $500,000,000 of goods a year. The deficit is covered, presumably, by invisibles and triangular trades.
You will recall that Sir Anthony Eden has personally communicated to you the concern which would be felt in the United Kingdom if bicycle duties were increased.
The Department of State has also received strong representations on this matter from other governments concerned, i.e. West Germany, France, the Netherlands, Austria and Belgium.
These are the international and foreign affairs factors which you may want to weigh along with such other factors as may be involved.
Faithfully yours,
- Source: Department of State, Central Files, 411.004/8–1055.↩
- Document 36.↩
- Printed from a copy which bears this stamped signature.↩