New Signals on Peking

The President of the U.S. hoisted the signals for a reappraisal of one of the fundamental policies of his Administration: the longstanding U.S. quarantine of Communist China. Last week, reflecting his own personal convictions, mounting pressure from such trade-strapped allies as Britain and Japan and the pleas of some elements of U.S. business, he made it clear that he believes that present tough trade restrictions on Peking are not realistic for the long pull.

He said as much at his weekly news conference in reply to a double-barreled question about 1) the "durability" of U.S. relations with the Chinese Nationalists on Formosa, and 2) the "possibility" of reopening U.S.-Red Chinese trade. U.S.-Formosan relations, said the President, "are unchanged as a result [of the Taipei riots] as of this moment, and so far as I know, no one has suggested any change." As for trade with Peking, the embargo against it is a matter of "law" and "so long as that law is on the books, of course, that is that."* Correspondents quickly noted that he did not exclude a reconsideration of the U.S. embargo. Declared Ike. after briefly summarizing the arguments for and against relaxation: "Frankly, I am of the school that believes that trade in the long run cannot be stopped. You are going to have either authorized trade or clandestine trade."

The Important Front. The President's remarks were anything but spur-of-the-moment observations. To begin with, he had been surprised that both Congress and the press had taken the unilateral British decision to resume nonstrategic trade with Peking (TIME. June 10) with such equanimity. Since he is personally more or less in sympathy with the British position that the European front is the really important one in the cold war, he deemed it reasonable that trade restrictions on Red China--growing out of the Korean war--need no longer be tougher than restrictions on Russia. Said one White House staffer: "Let's face it. Behind the President's remarks is his very real thinking that it is idle to attempt indefinitely to arrest the flow of water downhill. Every dam must have its outlet."

The President's remarks gave an enormous boost to some of his advisers who believe that the U.S. should join in Red China trade. Leader of the pro-trade forces is Chicago Industrialist Clarence Randall, chairman of the Council on Foreign Economic Policy. Among his most potent arguments, as Ike summarized it at his press conference: "Trade in itself is the greatest weapon in the hands of a diplomat." Ike's chief economic adviser, Gabriel Hauge, sympathizes with the Randall view. There are also followers of this line of reasoning within the State Department itself; e.g., Under Secretary of State Christian Herter and Deputy Under Secretary Douglas Dillon accept it, at least in theory. CIA Director Allen Dulles, brother of the Secretary of State, is also in favor. Among Allen Dulles' reasons: even a trickle of U.S.-Red China trade would give his agents great intelligence opportunities in Peking.

The Important Risk. Dead set on the other side of the argument--and against any "liberalized" China policy--are the President's closest foreign-policy advisers, led by Secretary of State John Foster Dulles and Walter Robertson, Dulles' Assistant Secretary for Far Eastern Affairs. Together with Defense Secretary Wilson and all the Joint Chiefs of Staff, they argue vehemently for the current official position that the U.S. (as Robertson crisply puts it) must take no action "which would create international prestige for the [Peking] regime."

Whatever the validity of these conflicting positions, the President last week clearly took his stand with those who believe that a limited resumption of Red China trade is inevitable--certainly for Japan and Britain, to say nothing of other trading nations. He did so at considerable risk of weakening an important U.S. position : in much of Asia, such a move would be regarded as a first step toward an eventual reversal of Washington's "tough China" policy--a step which the Peking-style China Lobby will do its best to stretch into diplomatic recognition of the Peking regime, its seating in the United Nations and the consequent downgrading of the Chiang Kai-shek government.

*The President erred if he meant that only Congress could revoke the embargo. The applicable law is the 1917 Trading with the Enemy Act, which President Truman invoked after declaring a state of national emergency when Communist China entered the Korean war. The President at his own discretion can return the embargo law to its stand-by status simply by declaring the national emergency at an end.

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