President Reagan, carrying through with a threat to retaliate against Japanese manufacturers for violations of a computer chip agreement, today slapped 100% tariffs on four categories of Japanese goods, including computers and color televisions.
Reagan said the tariffs--the first major trade sanctions against Tokyo since World War II and ones which could in effect double the cost of the items--will cover $300 million in annual sales.
“The products upon which the tariffs are being raised were chosen to minimize the impact on American consumers and businesses,” Reagan said in a statement. “All these products are available from domestic or other foreign producers.”
Variety of Items
The affected products are:
--Color televisions with 18-inch, 19-inch and 20-inch screens.
--Power drills with chuck sizes of 1/2-inch or larger; power sanders, grinders, polishers and percussion hammers.
--Lap-top computers with liquid-crystal screens.
--Most desk-top computers and calculators now on the market.
The list of items was cut down from an initial compilation put out by the White House late last month. That list included refrigerators, film, computer disks and automobile stereos.
Reagan said the tariffs, which take effect immediately, would offset the $300 million in losses claimed by U.S. semiconductor makers as a result of violations of the 1986 agreement.
Under that agreement, Japan promised to stop “dumping” semiconductors, or computer chips, at prices far below their true value in third-nation markets, and to open Japanese markets more fully to U.S. computer chip sales.
“The health and the vitality of the U.S. semiconductor industry are essential to America’s future competitiveness,” Reagan said in a statement from his ranch here. “We cannot allow it to be jeopardized by unfair trading practices.”
The tariffs were made effective immediately and cover products now stored in American warehouses as well as those to come into the U.S. market in the future.
Reagan, ignoring Tokyo’s warnings of retaliation and a last-minute appeal from Japanese Prime Minister Yasuhiro Nakasone, put the tariffs on products selected from a list representing $1.8 billion in U.S. imports, only a fraction of the $23.7 billion in Japanese electronic goods sold in the United States in 1986.
“I regret that these actions were necessary,” Reagan said. “We will eliminate them 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.”
Administration and industry officials said the action would send a powerful signal to Congress and U.S. trading partners that Reagan is determined to fight unfair trade practices abroad.
Despite Japanese claims to have taken steps in recent weeks to assuage U.S. concerns, U.S. Trade Representative Clayton Yeutter said the tariffs will not be removed until compliance with the September, 1986, semiconductor agreement can be verified, which could take several weeks at the least.
“We can’t back off on this action with one or two days of compliance,” he said. “We want to see a pattern of compliance.”