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100% Tariff Put on Some Japan Goods : Reagan Move to Halt Chip Dumping Could Double TV, Computer Prices

April 18, 1987|JAMES GERSTENZANG | Times Staff Writer

He said he thought Japan would be able to provide convincing new data on gains of sales of American semiconductors in Japan and proof that Japanese chip makers were not dumping in third-country markets "by the time Prime Minister (Yasuhiro) Nakasone visits Washington" April 29 to May 2.

"The problem is whether the United States will evaluate that data as convincing," he added.

The measures taken Friday are considered the most stringent economic steps taken against Japan since World War II, and they reflect the increasingly volatile U.S.-Japanese trading relationship.

Seek to End Other Quotas

Even as the Administration was clamping down the sanctions, Agriculture Secretary Richard E. Lyng and Yeutter were preparing to seek total elimination of Japanese quotas on the import of American beef and oranges during next week's visit.

U.S. officials have credited Nakasone with trying to improve ties with the United States in a broad range of categories, and particularly in the area of defense, where Japanese spending is increasing, after years of U.S. pressure for a greater contribution to the allied effort in the Pacific.

The timing of Nakasone's visit to the United States, made even more crucial as a result of Friday's announcement, could serve as a political embarrassment to him.

Reagan said the U.S. tariffs would be abandoned "as soon as we have firm and continuing evidence that the dumping in third-country markets has stopped and that access to the Japanese market has improved."

Fitzwater said it was uncertain how long this would take, but he said that the tariffs would be applied for several weeks at "a minimum."

When asked whether Nakasone, in his visit, would be able to win a modification or lifting of the sanctions, Fitzwater replied: "No, we're looking for a change in market conditions."

Correspondence Cited

He said that Nakasone had recently written to Reagan about the dispute, and that the President responded Thursday evening, informing the Japanese prime minister "in a personal way" of the decision to proceed.

Expressing sensitivity to the possible repercussions of the sanctions, Fitzwater said: "We do not want a trade war or to precipitate anything that would come close to that."

Tamura expressed sympathy both for the Reagan Administration and the United States.

He said he realized that Yeutter "had to look both in front and back" in dealing with Japan, on one hand, and the U.S. Congress, on the other. He attributed Reagan's decision to carry out the sanctions to "American frustrations" with a lack of improvement in its trade imbalance with Japan, which last year reached $58.6 billion.

In the first two months this year, the bilateral deficit was running at an annual rate of $56.6 billion.

U.S. "frustrations" also have been fueled, Tamura said, by its own inability to reduce the federal government's budget and to what he called "exhaustion" of the American economy itself. He admitted, however, that Japan's failure to come up with a convincing program to expand domestic demand and pull in more imports was playing a role in American "frustrations."

Rejects Amending Pact

Makoto Kuroda, MITI's vice minister in charge of international affairs, ruled out renegotiation of the U.S.-Japan Semiconductor Agreement, but said talks he conducted in Washington in the last two weeks showed that a "discrepancy" existed in the interpretations of the two nations of what Japan committed itself to carry out under the agreement.

"We should exchange opinions in order to reach a better agreement on what is written in the agreement," Kuroda said.

While the trade action, given final approval Friday morning by the President while he was on vacation at his ranch 30 miles northwest of Santa Barbara, is a sour note in the U.S.-Japanese relationship, its political impact in this country could be just the opposite.

The Administration has been under pressure to protect U.S. jobs from competition overseas, and it is fighting a proposal advanced by Rep. Richard A. Gephardt (D-Mo.) that would limit its flexibility in responding to what it sees as unfair trading practices by imposing specific sanctions.

Gephardt, a presidential candidate and one of the strongest congressional advocates of protectionist trade measures, approved Friday's action. "Our trading partners need to know that we'll hold them to their word in trade agreements with us," he said. "The semiconductor case reaffirms the need to enact trade legislation which insists on results backed by sanctions."

Staff writer Sam Jameson in Tokyo contributed to this story.

Products Affected by U.S. Sanctions

Here are some questions and answers about the tariffs imposed by President Reagan:

Q. Exactly which computer products are affected?

A. Two kinds of computers are affected, portable microcomputers and desk-top computers, both with a power of 16 bits or more. Companies whose products are subject to the tariffs include Toshiba, NEC, Mitsubishi, Fujitsu, Matsushita, Sanyo, Canon, Sony, Sharp and Epson. Mainframe and supercomputers are not affected by the order.

Q. Which color televisions are involved?

A. Finished color television sets having 18- through 20-inch diagonally measured screens. Affected companies include Panasonic, NEC, Toshiba, Hitachi and Mitsubishi.

Q. Which power hand tools are covered?

A. Rotary drills that are not battery powered and that have a chuck of one-half inch or greater capacity; electropneumatic rotary and percussion hammers; certain grinders, polishers and sanders. Affected companies include Hitachi, Makita and Ryobi.

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