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THE VENICE SUMMIT : President Lifts $51 Million of Japan Tariffs

June 09, 1987|TOM REDBURN and DONNA K.H. WALTERS | Times Staff Writers

VENICE, Italy — President Reagan, moving to ease U.S.-Japanese trade tensions, on Monday lifted $51 million of the $300 million in sanctions he imposed against Japanese imports six weeks ago.

The move, announced after a meeting here between Reagan and Japanese Prime Minister Yasuhiro Nakasone, came in response to Tokyo's efforts to comply with a wide range of U.S. political and economic demands in addition to the concerns over semiconductor trade that triggered the sanctions.

Cool Reaction

Japanese officials, however, reacted coolly to the U.S. action, and the reaction from U.S. congressional and industry leaders was mixed.

Administration officials in Venice for the 13th economic summit said the United States will lift the 100% tariff on 20-inch color television sets but retain tariffs on other Japanese products, ranging from television sets of other sizes and certain power tools to high-powered personal computers.

However, a Commerce Department spokeswoman in Washington said the official list of products that will be removed from the sanctions list has not yet been determined. She said that 18- and 19-inch color television sets, as well as power hand tools, might be dropped from the list.

If the lifting of tariffs is limited to 20-inch color TVs, it is unclear what impact, if any, the decision would have. The U.S. government earlier identified five Japanese makers of televisions it said would be hurt by punitive duties on 18-, 19- and 20-inch color TVs. However, on Monday, each of those companies said it had not been affected by the imposition of sanctions on 20-inch televisions because such sets are produced in the United States.

Thus, the companies said, the lifting of the tariffs would not make any difference to them except as a symbolic gesture.

In fact, the sanctions, affecting only a minute portion of Japan's nearly $80 billion in annual exports to the United States, have been seen as primarily symbolic--a view that was reinforced Monday.

Reagan imposed the tariffs April 17 in retaliation for Japan's failure to enforce a semiconductor trade agreement that sought to end dumping of computer chips and bolster sales of U.S.-made chips in Japan.

On Monday, the President cited improved Japanese compliance with the trade accord, but the partial lifting of the sanctions also appeared to be prompted by his desire to smooth over relations with Nakasone. Reagan told Nakasone of the decision during their 40-minute meeting here Monday.

Reward 'for Their Effort'

Reagan later said: "We have to recognize that there are people in Japan, like Prime Minister Nakasone, who have worked very hard, and we think that they ought to be rewarded for their effort."

White House Chief of Staff Howard H. Baker Jr., in a briefing for reporters, said, "The commercial and the foreign policy relationship between the United States and Japan is enormously important and the President, I'm sure, took all factors into account as he reached this decision to have a partial lifting of sanctions."

Japanese officials here contended that the President should have eliminated all the tariffs. Hajime Tamura, Japan's minister of international trade and industry, said he appreciated Reagan's move "to some extent" but added that Tokyo believes "there is no longer any ground for maintaining the measures."

Tamura added, "The Japanese government strongly expects . . . an early and total lifting of the measures."

But even the Japanese have acknowledged that little progress has been made on the part of the pact that calls for increased access to Japan's chip markets for foreign producers. They contend, however, that dumping of computer chips--that is, selling below fair market value--has virtually been halted.

In this area, White House officials also said that progress has been made and called the partial lifting of sanctions an "incentive" for further compliance.

Administration officials said Japan has helped boost the price of sophisticated computer memory chips in Southeast Asia by about 63%, but they said that Japanese chips still are being dumped at prices 15% below fair market values in countries other than the United States and Japan. The partial lifting of sanctions, White House officials said, was "in proportion" to these Japanese efforts.

"The President is saying (to the Japanese) that 'we're offering you an incentive,' " Baker said. "If (the Japanese) continue to stop the dumping of semiconductors, (they) can expect that there'll be continuing relief from the sanctions that were imposed about six weeks ago."

Industry trade groups said they support the partial lifting of the sanctions. The Semiconductor Industry Assn., which fought for the trade agreement and then for sanctions when it appeared the pact was being violated, called Monday's move a "good-will gesture" that might encourage further compliance.

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