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— page three e large Corporations : the Elgin and the Hamilton Watch €2!s. Despite this, chances are that the move will succeed, esoecially since the Trade Unions have come to the help of the corporations. This is unfortunately not all. In fact the Tarriff Commission is presently studying 16 recommendations for the appli= cation of the Escape-Clause, and in the majority of instances it is to be feared thi the recommendations will be hpstile to European Imports. : This tendency hence implies the gravest dangers for the European—American relations, The Dollar gap is again increasing. It is the reason, why several European countries have been compelled to close their borders to imports, or to try to limit trade. It is certain that with the present trend the trade gap will only increase and that rising Dollar-shortages must be expected, From the American point-of-view this implies two very bad political riskse First of all, the whole aim of the Marshall aide was to make of Europe again a going concern, This is the reason why such large sums of money were apprppriated for industraal expansion, And this was successfulle Today Western Europe's potential is fully reconstructed. But it lacks a market. In the past, normal exchanges went in a large proportion to the Hast, Now the East is incorporated in the Soviet realm, and hence has no trade with the West. This trade with the East is furthermore banned under the Mutual Security System. But the two pronged risks arise at this point, The first one is, that the tendency is rapidly growing in Europe demanding, in view of America's econo= mic isolationism, a retrn to the trade with the Baste The Soviets know exactly this possibility and hence are floofling Europe with increasingly favourable trade offers. Russia feels that these offers have a large political audience, And the leaders in America begin to understand that these renewed trade offers are the new Troyan Horse with which to enter the West European stronghold, If no solution is found to the problem of trade with America, the economic Western Front will collapse, beginning later this year. The other possibility for the Americans is, if they can not open their market more widély, to continue in increased manner the policy of subsidies as in the times of the Marshall plan. The best form would be the off-shore buying, by MSA, But this has the danger of unfavourable reactions inside the USA, where people are getting very tired of paying taxes for foreign subsidies, Hence the off-shore buying has been very limited, Between the inner pressure end the outward dangers, the Americans are waveringe In private leaders agree, that only a lowering of the customs barriers could solve the present grave problem. But they also say, i
