INTERNATIONAL: Trade War

Going great guns last week was a full-sized trade war between France and Britain. Repeal in the U. S. was largely to blame. Fighting for a larger share of the newly-established liquor trade, France agreed to accept greatly increased quotas of U. S. apples and pears in return for more wine shipped to the U. S. (TIME, Jan. 1). Anxious as France is to help her vintners, she is still more firmly bound to the quota system and economic self-sufficiency. Hence some other import quotas had to be decreased, and it was the British that suffered. British shipments were reduced £3,000,000 in value and the license tax on British coal drastically upped.

Last week Britain retaliated in kind. Led by President Walter Runciman, the Board of Trade put into effect a 20% increase of duty on most French imports. When it was presented to the House of Commons for approval three days later, only a handful of Laborites and Free Traders voted against it. Even monocled Sir Austen Chamberlain, famed as Britain’s ablest Francophile, voted for the tariff. More in sorrow than in anger he announced:

“The French in their treatment of British trade have been unfair, unjust, and intolerable. No other course is open to Britain. It is enough to drive almost to despair an Englishman who has done all he could to promote good understanding between these countries.”

It was France’s turn next. By denouncing commercial treaties between France and Britain signed in 1882 and 1926 she fired a mighty salvo which, however, will not hit its target until three months hence. Long have these particular treaties been under attack by French shipping interests, as they gave Britain marked advantages in carrying freight between France and her colonies.

There at week’s end matters rested with both sides hinting broadly that all reprisals might be called off IF each would agree to return to the economic status quo of last summer. Britain, however, was able to strengthen her position with a new commercial treaty with Soviet Russia to take the place of the one canceled last March at the time of the sabotage trial of British electrical engineers in Moscow (TIME, March 27). Waiting brought Britain advantages. Last year the Soviet sold twice as much to Britain as she bought. Under the new treaty Russia must buy $1,000,000 worth of British goods for every $1,600,000 worth she sells, and the ratio will gradually be narrowed until trade balances.