Reagan Backs Down, Orders Limited S. Africa Sanctions : Measures Like Those He Had Threatened to Veto

President Reagan, bowing to political pressure under threat of a foreign policy defeat, backed off from his previous opposition and ordered limited economic sanctions today against South Africa in a move “aimed against the machinery of apartheid.”

Reagan, in an Oval Office ceremony, signed an executive order limiting bank loans and sales of computer and nuclear technology, as well taking as steps to halt U.S. imports of the krugerrand to underscore U.S. displeasure with apartheid.

In addition, Reagan dispatched U.S. Ambassador Herman W. Nickel back to Pretoria after a three-month absence with what Administration officials described as a strong letter urging changes in South Africa’s racial policies.

The sanctions Reagan imposed today are similar to those he had threatened to veto if approved by Congress. Congressional leaders had warned in advance that any veto of the measure would be overridden.

‘We Believe It Is Wrong’

“The system of apartheid means deliberate, systematic, institutionalized racial discrimination denying the black majority their God-given rights,” the President said. “We believe it is wrong. We condemn it. And we are united in hoping for the day when apartheid will be no more.”

As Reagan veered from his policy of “constructive engagement” for the first time in his presidency, the reaction from the Pretoria government was immediate.

President Pieter W. Botha condemned the action, saying that “sanctions cannot solve our problems” and that they could incite more of the racial violence that has killed about 700 people in the last year. (Story on Page 2.)

Acceding to congressional demands that the United States stiffen its opposition to the South African policy of racial segregation, Reagan’s executive order draws heavily from a House-passed bill pending in the Senate that he had vowed to veto.

GOP Sigh of Relief

Administration officials voiced hope that the move would forestall passage, which would have been certain to lead to a veto and a subsequent override vote by Congress, raising the prospect of a damaging political defeat for Reagan at the start of a crowded fall agenda.

Senate Republican leaders immediately breathed a collective sigh of relief and sought a delay in passage of South Africa sanctions.

But Democrats criticized the President and vowed to press for an immediate vote on the measure.

“It seems to me we have prevailed,” said Senate Majority Leader Bob Dole (R-Kan.) in telling reporters that he will seek a delay in passage of the bill. “The President has agreed to many of the things we wanted. We ought to commend the President.”

But House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.) said Reagan’s own sanctions are “chock-full of loopholes” and will “play in Pretoria” without having much impact on strict South African race laws.

‘Ill-Disguised, Ill-Advised’

Rep. William H. Gray III (D-Pa.), author of the House version of the sanctions bill, accused Reagan of “an ill-disguised and ill-advised attempt to circumvent the overwhelming bipartisan consensus in the Congress.”

Sen. Edward M. Kennedy (D-Mass.) said he will demand a vote later this fall if Republicans succeed in winning an immediate delay. “The members (of Congress) should take a position,” he said.

Reagan, while underscoring mounting U.S. frustration with the racial unrest and violence in South Africa and the government’s refusal to propose serious reform, cited limits to what the United States can do to bring about an end to apartheid “as soon as possible.”

“We can’t give orders to the South African government,” he said.

Reagan said his adoption of a course of action he had resisted for more than four years was not a change in policy but an overture for Congress and the American people to “join together behind a common program.”

Objects to ‘Overhang’

Secretary of State George P. Shultz contended that Reagan “remained true” to his opposition to sanctions by eschewing more severe steps such as U.S. divestiture from South Africa, which would hurt the interests of blacks.

Shultz said the Administration’s greatest objection to the bill before Congress is “the overhang” of stiffer economic sanctions if the South African government failed to move quickly toward change.

The executive order:

--Bans bank loans, except those for educational, housing or health facilities for all races or those that will promote economic opportunities for nonwhites.

--Bans the sale of computer technology to agencies that administer or enforce apartheid.

--Bans the transfer of most nuclear technology.

--Bans the importation of South African munitions.

--Bans export assistance to U.S. companies operating in South Africa that do not adhere to principles of nondiscrimination known as “the Sullivan Code” after the Rev. Leon Sullivan of Philadelphia.

--Mandates consultations with U.S. trading partners on banning importation of the krugerrand gold coin.

--Increases scholarships for nonwhites and support for human rights programs.

--Creates an advisory committee to recommend, within 12 months, other steps to encourage “peaceful change” in South Africa.