Remember back in April of this year when Washington slapped a tenfold increase in tariffs on heavyweight motorcycles? The intent of that action was to protect Harley-Davidson - the last surviving manufacturer of US-made motorcycles - from foreign (mainly Japanese) competition. Then, earlier this month, the US announced that it would raise tariffs and set import quotas on a number of overseas specialty steel products, the reason being to protect US steel firms. In other words, two major protectionist moves at a time when Washington policymakers, eager to ensure the success of world economic recovery, are publicly decrying the global trend towards protectionism.
What, you are probably asking, is the next candidate for quotas or tariffs?
The answer is red meat. And the expected quota on meat imports demonstrates once again why the US - and indeed all major trading nations - need to take all possible actions to avoid a new round of protectionism and concentrate on expanding, not restricting, world commerce in general.
In fairness, it should be pointed out that the quotas which are expected to be imposed on red meat imports stem from a little-known law enacted back in 1979 . That measure requires imposition of quotas when imports begin to grow faster than the sale of US-produced meat. Under the complicated formula worked out for this method of protecting the domestic beef and meat industry, it is now anticipated that the trigger point will be reached sometime in August or September.
Imposing new quotas on meat products may not seem all that important to most Americans. Some overseas nations may actually profit from the quotas, in the sense that they will be able to pin down specific, and in some cases enlarged, market shares for their products. And it is not certain that supermarket prices will rise. The domestic meat industry is only now emerging from a two-year slump in sales. The $50 billion-a-year meatpacking industry has been in upheaval the past several years, beset by strikes, closing of some plants, financial difficulties, etc.
But what is of concern is that, in each case where new quotas have been imposed or tariffs hiked, Congress and the administration have in effect told the rest of the world that all the dire warnings about the dangers of protectionism can be ignored when domestic political and economic considerations are raised. Such an attitude can only pose larger problems for the US down the road.
Later this year, for example, President Reagan is scheduled to visit Japan. One of the purposes of that trip will be to persuade Tokyo to dismantle its many protectionist measures restricting US imports - including stiff quotas on US citrus and meat products. If Washington goes ahead and imposes quotas on meat imports, Mr. Reagan will surely have a harder time persuading Tokyo to curtail its quotas on US meat products.
The administration - and Congress, which wrote the 1979 law on meat quotas - should think twice before adding red meat to the growing list of protected products.