Reagan Acts to Curb Imported Machine Tools

President Reagan said Tuesday that the United States has set limits on machine tool imports from West Germany and Switzerland and will take action against those countries if the limits are exceeded.

Reagan’s announcement followed the earlier negotiation of voluntary agreements with Japan and Taiwan to restrict machine tool exports to the United States.

Commerce Secretary Malcolm Baldrige said the five-year restrictions would require West Germany to roll back exports of some machine tools to 1981 market share levels and others to 1985 levels.

Switzerland, he said, would be required to roll back exports of computer-controlled punching and shearing machines to 1985 levels.

Reagan and Baldrige said the steps were aimed at buying time for the import-battered U.S. industry to regain its competitiveness.

“These measures are not intended to be a permanent solution to industrial problems,” Baldrige said. “They are intended to be a temporary, yet sufficient, respite so the industry can make the necessary adjustments.”

National Security Cited

Reagan sounded a similar theme, saying: “The revitalization of the domestic machine tool industry is primarily the industry’s own responsibility. However, for national security purposes, the government has a role in facilitating the industry’s recovery effort.”

The agreement with Japan, announced last month, would require that nation’s share of the U.S. market to drop to about 1981 levels. The Taiwan agreement requires similar market-share reductions.

Assistant Commerce Secretary Paul Freedenberg said the Administration was also sending letters to seven other countries, warning them not to try to expand their share of the U.S. market at the expense of the four countries that are cutting back. He refused to identify the countries, saying the letters were only sent on Tuesday and had not been received yet.

Reagan did not spell out what action he might take if countries exceeded their limits. But Baldrige said: “The President has said he will not hesitate to take any appropriate action under U.S. law to restrain imports from these countries should it become necessary.”

Baldrige said the moves should be worth about $800 million a year in additional revenue for the domestic machine tool industry. Freedenberg said the steps would also save about 10,700 jobs that were projected to be lost in the U.S. industry over the next five years if imports continued at current levels.

Mike Codel of the National Machine Tool Builders Assn. said the industry has lost 35,000 jobs nationwide since 1981, when employment was at 98,300. Codel said the employment level had dropped to 63,000 workers in 1984, the last year for which reliable figures were available.

Freedenberg said he expected that West Germany and Switzerland, while unwilling to sign a formal voluntary restraint agreement, would comply with Reagan’s request to curtail machine tool exports.