Word: surtaxable
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...Until last week, Connally had indicated that the U.S. intended to turn its chronic balance of payments deficit into a surplus-and was prepared to use its economic weapons, notably the 10% surtax on imports, for as long as it took to accomplish the goal. But at the IMF meeting, Connally dropped the requirement that the U.S. must be in the black before it would scrap the surtax. Instead, he said at a press conference, what was needed was "assurances that a formula and procedure is agreed on that will rectify" the U.S. imbalance. The U.S. will chuck the surcharge...
...Connally has thus far refused to say precisely what bars must be lowered before the U.S. will drop the surtax, for the gamesmanlike reason that he wants other nations to make the first offer. Clearly, any progress in eliminating these barriers depends on how reasonably both sides define "tangible" concessions. Although far more conciliatory than before, Connally still sought leverage wherever he could find it. According to a Canadian version, he approached Finance Minister Edgar Benson at one point and drawled: "The Europeans and Japanese are ganging up on us, and we North Americans have to stick together...
Foreign nations have been injured by three parts of the President's program. The 10% surtax has obviously made many foreign-produced goods less competitive in the U.S. market. On top of that, the proposed investment tax credit for business does not apply to the purchase of imported tools and machines; U.S. businessmen must "buy American" to take advantage of the boon. Finally, some foreign leaders -particularly in France and Germany -are upset because the U.S. has refused to devalue the dollar by raising the price of gold. Instead, Washington is holding out for them to revalue their currencies...
...these inequities. Nixon's program is designed to jolt them into much-needed negotiations. What disturbs foreign leaders is the possibility that the President might become so enthused by the domestic popularity of his program that he will push them too hard, demand too much, and retain the surtax too long...
...refused to consider an upward revaluation of the yen, which has risen about 6.5% -far less than the U.S. wants-since Tokyo reluctantly decided to float it against the dollar last month. He also suggested that U.S. manufacturers would benefit from "more aggressive salesmanship," and told Rogers that the surtax must be quickly rescinded, hinting that Tokyo might otherwise be forced to use "countermeasures...