Ronald Reagan 1987 Comments on Tariffs

Ronald Reagan 1987 Comments on Tariffs

Listen:

• mediaBrew Media Player: ( 5 Min. mp3)
• Default Device Player: ( 5 Min. mp3)

Summary

The upcoming visit of Japan’s Prime Minister Naka Sony to the White House highlights the importance of U.S.-Japan relations, particularly in the context of recent trade disagreements. President intends to address these issues, notably the new tariffs imposed on certain Japanese products due to perceived unfair trade practices in the semiconductor sector. While acknowledging the need for these tariffs to address specific problems, he emphasizes that such measures are not taken lightly as they can adversely affect American workers and consumers in the long run.

The President stresses the principle of fair trade, asserting that all trading partners should adhere to their agreements to foster economic prosperity. He draws on historical lessons from the Great Depression to illustrate the detrimental effects of protectionist policies, which can lead to retaliation and a cycle of escalating trade barriers. High tariffs may initially seem beneficial for domestic industries but ultimately hinder competition and innovation, resulting in job losses and economic downturns. Biden’s commitment to free trade aims to avoid repeating these past mistakes while addressing unfair practices.

In conclusion, the forthcoming discussions with Prime Minister Naka Sony and the impending economic summit are crucial for maintaining open trade relations. The President expresses concern over proposed Congressional legislation that could further restrict trade options and urges vigilance against protectionist tendencies. He emphasizes the vital connection between trade policies and American jobs, underscoring the necessity of preserving a commitment to free trade for overall economic growth.

Transcript

My fellow Americans, Prime Minister Nakasone of Japan will be visiting me here at the White House next week. It’s an important visit because while I expect to take up our relations with our good friend Japan, which overall remain excellent, recent disagreements between our two countries on the issue of trade will also be high on our agenda. As perhaps you’ve heard, last week I placed new duties on some Japanese products in response to Japan’s inability to enforce their trade agreement with us on electronic devices called semiconductors.

Now, imposing such tariffs or trade barriers and restrictions of any kind are steps that I am loath to take, and in a moment I’ll mention the sound economic reasons for this, that over the long run such trade barriers hurt every American worker and consumer. But the Japanese semiconductors were a special case. We had clear evidence that Japanese companies were engaging in unfair trade practices that violated an agreement between Japan and the United States.

We expect our trading partners to live up to their agreements. As I’ve often said, our commitment to free trade is also a commitment to fair trade. But you know, in imposing these tariffs we were just trying to deal with a particular problem, not begin a trade war.

So next week I’ll be giving Prime Minister Nakasone this same message. We want to continue to work cooperatively on trade problems and want very much to lift these trade restrictions as soon as evidence permits. We want to do this because we feel both Japan and the United States have an obligation to promote the prosperity and economic development that only free trade can bring.

Now that message of free trade is one I conveyed to Canada’s leaders a few weeks ago, and it was warmly received there. Indeed, throughout the world there’s a growing realization that the way to prosperity for all nations is rejecting protectionist legislation and promoting fair and free competition. Now there are sound historical reasons for this.

For those of us who lived through the Great Depression, the memory of the suffering it caused is deep and searing. And today many economic analysts and historians argue that high tariff legislation passed back in that period called the Smoot-Hawley Tariff greatly deepened the Depression and prevented economic recovery. You see, at first when someone says let’s impose tariffs on foreign imports, it looks like they’re doing the patriotic thing by protecting American products and jobs.

And sometimes for a short while it works, but only for a short time. What eventually occurs is first homegrown industries start relying on government protection in the form of high tariffs. They stop competing and stop making the innovative management and technological changes they need to succeed in world markets.

And then while all this is going on, something even worse occurs. High tariffs inevitably lead to retaliation by foreign countries and the triggering of fierce trade wars. The result is more and more tariffs, higher and higher trade barriers, and less and less competition.

So soon, because of the prices made artificially high by tariffs that subsidize inefficiency and poor management, people stop buying. Then the worst happens. Markets shrink and collapse, businesses and industries shut down, and millions of people lose their jobs.

The memory of all this occurring back in the 30s made me determined when I came to Washington to spare the American people the protectionist legislation that destroys prosperity. Now, it hasn’t always been easy. There are those in the Congress, just as there were back in the 30s, who want to go for the quick political advantage, who risk America’s prosperity for the sake of a short-term appeal to some special interest group, who forget that more than five million American jobs are directly tied to the foreign export business and additional millions are tied to imports.

Well, I’ve never forgotten those jobs, and on trade issues by and large we’ve done well. In certain select cases, like the Japanese semiconductors, we’ve taken steps to stop unfair practices against American products, but we’ve still maintained our basic long-term commitment to free trade and economic growth. So with my meeting with Prime Minister Nakasone and the Venice Economic Summit coming up, it’s terribly important not to restrict the President’s options in such trade dealings with foreign governments.

Unfortunately, some in the Congress are trying to do exactly that. I’ll keep you informed on this dangerous legislation because it’s just another form of protectionism, and I may need your help to stop it. Remember, America’s jobs and growth are at stake.

Until next week, thanks for listening, and God bless you.