168. Editorial Note
On February 16, 1973, from 10:33 until 11:59 a.m., President Richard Nixon discussed international trade and monetary affairs with members of the Cabinet. Nixon described the growing share of Japanese companies in many markets: “Everybody knows the big Japanese trading companies are all directly co-owned by the Government in one way or another. So, what happens is that the Japanese, looking around the world, pick them off, loss leader, knock somebody else out of their boundaries. And every—Ten years ago, [John] Foster Dulles, in 1957– 58 expressed great concern about the possibility that the Russians would do that, because, he said, they did not have a private enterprise and the Russians might, around the world, as they became more industrialized, pick off various markets, put them—sell things in a loss leader basis, which they could well do, gobble up the market, and that we ought to have some kind of a program. Do you remember, we used to have the meeting right in this room? In ’57, about a year before he died. Now, I don’t know on the Japanese thing. We have a very delicate thing on [unclear] somebody brought in something, said I should take a few weeks and go through this. [Unclear] I have received Tanaka here, so he will come to do it some time, get the Emperor a state visit, and all the rest, so we probably could do that. But all this business of the diplomatic talk, and drinking sake, and whatever they’ll drink and so forth and so on, does not get away from the fundamental problem that Japan today, in terms of trade area, is not being a good partner, and, in fact, in terms as far as Tanaka is concerned, of our international responsibilities, is not being a good ally. Now, what do you do about this? Do you do it—just sort of brush it all over and toast the Emperor, and Tanaka and the rest? No, you have to find ways to get at that so that in our whole deliberations here, without getting to be jingoistic, do we regard the Japanese as protection in regard to the Europeans? We in this room have to understand that we’re in a tough-titty game with both Europe and Japan. Do you agree with that?”
Shortly thereafter, Nixon added, “But see that in this field, and here I always kid George [Shultz] about it, because, you know, he’s the biggest free trader we’ve got in the Cabinet next to me, but the point is that—the thing is that we must not feel right now [unclear] because of this problem so we’ll just have a currency devaluation; that’s where the Americans want their say. We’re [unclear] without a safeguard, and this, and that, and the other thing, and that’s going to go down. Even the opening up of markets, George, let’s face it, unless our companies are going to get off their tails and be competitive, unless American business is competitive—and American labor—we’re not going to solve problems. And, so, to build the kind of a world—economically—probably the U.S. could get along as a Fortress America. But if we become a Fortress America economically, we then become a fortress America militarily and politically, and that’ll destroy us. So that’s why this economic thing has got to be thrown into the political thing each time.” (National Archives, Nixon Presidential Materials, White House Tapes, Oval Office, Conversation No. 114–1. No classification marking. The editor transcribed the portions of the tape recording printed here specifically for this volume.)