The New General Tariff Proposals

«The Economist», 15 Novembre 1919, pp. 903-904

Turin, October 27

With the general elections pending, all the Parliamentary Commissions have suspended work. The Chamber of Deputies Commission, which ought to report on the new general tariff, had to leave its work unfinished. The Government took the opportunity for sending the new tariff for examination to the most important manufacturing and trading associations, asking for their advice. What will be the response of the trade world is uncertain. But it is highly probable that in manufacturing circles the proposals will create a clamour for greater protection, and that the voices requesting a lowering of the highest duties will be few, mostly from the agricultural interest. The new tariff ought, indeed, to alarm consumers and maritime and trading interests. The tariffs are really two: 1) the first is to apply provisionally only to goods imported from ex-enemy countries. The existing general tariff is to be increased by a supplement, which goes from 20 to 400 per cent. – in one case to 1,000 per cent. – of the existing duty. This tariff will necessarily have a short life. 2) The second, or new general tariff, is much more important, as it will take the place automatically of all the existing tariffs with the countries with which the present commercial treaties will not be renewed. The trend of the new tariff is distinctly Protectionist. Take the example of machinery. I give below a comparison between the old (existing) general tariff and the new tariff proposals:

Next to the great all-round increase in the duties the most interesting feature is the minute discrimination in the qualities of the goods dutiable. For instance, the present tariff groups all the spinning machinery under the same number, which is dutiable at 10 lire per quintal. Under the new tariff the spinning machinery will be divided into three classes:

The less the weight, the greater the duty per unit of weight.

The tariff aims at counterbalancing the increased cost of production: increases of wages, of coal, of transport, of taxes are the reasons which the compilers of the tariff quote in justification of the increases which tende to put a wall around the Italian borders. But, if the increase of cost is general, of what avail will be the tariff? So far, however, the public, absorbed in political and national contests, have paid but little attention to fiscal matters. They are much more interested in the plans for a levy on old and new capital, which are elaborated by Governmental Commissions. The few Free-traders and some agricultural organisations have not wholly lost the hope that the new Parliament will put an end to the efforts made to charge on industry and trade a tariff tax more onerous than a capital levy and an income-tax combined.