Office of the Historian

357. Telegram 4737 From the Embassy in the Dominican Republic to the Department of State1

Santo Domingo, September 28, 1976, 2030Z.

4737. Subject: Growing Negative Effect of Tripling Sugar Tariff. Ref: Santo Domingo 4646 and 4688.

1. Reftels have described some of the local negative reaction to the U.S. decision to triple the sugar import duties. We should report that, in addition, the U.S. action has cast gloom over the usually cheerful Dominican business community. Uncertainty over future business climate has caused a number of entrepreneurs to become very cautious until the full import and impact of the U.S. action becomes clear.

2. Our Palace sources inform us that President Balaguer is quite concerned over the U.S. decision. He sees that a number of countries are selling sugar to the U.S. without paying duty because their sales are less than dollars twenty-five million (at today’s prices, that’s a lot of sugar); he sees that a number of other countries have made long-term contracts to supply the U.S. sugar market; and he sees himself beginning to become isolated and discriminated against, although he has been a reliable sugar supplier in the past. This depressed mood combined with a situation of low sugar prices, high petroleum prices with prospects of an increase, serious electricity shortages adversely affecting factory production while producing only frayed nerves among the inconvenienced middle and upper classes are being closely watched by the moderate political opposition, the military and the extreme left.

3. Comment: In fragile societies, such as the Dominican, it doesn’t take much to change political tranquility and a buoyant business outlook into attitudes less friendly to our interests.

Hurwitch

  1. Summary: The Embassy reported on the concern created in Dominican business and official circles by the tripling of the U.S. tariff on sugar, a move that threatened to damage the local economy.

    Source: National Archives, RG 59, Central Foreign Policy File, D760366–1070. Confidential. In telegram 4656 from Santo Domingo, September 22, the Embassy transmitted a Dominican newspaper editorial that criticized the new U.S. tariff on sugar as “a punitive and undeserved action against the international income of underdeveloped countries.” This is the telegram mistakenly cited in this document as reference telegram 4646. (Ibid., D760358–0052) In telegram 4688 from Santo Domingo, September 23, the Embassy noted further reactions to the change in U.S. sugar policy. (Ibid., D760362–0523)

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