U.S. Draws Up Hit List of Japanese Goods

The Clinton Administration, turning up the pressure on Japan, today will announce a list of Japanese products that will be hit with punitive tariffs unless agreement is reached in a bitter trade fight involving automobiles.

U.S. Trade Representative Mickey Kantor scheduled a morning news conference to unveil the list of proposed sanctions.

Congressional and industry sources say they expect the list to cover about $6 billion worth of products, focusing on luxury cars.

Cars costing more than $30,000, including most Acura, Lexus and Infiniti models, could be hit with tariffs ranging as high as 100%, the sources said. Imported passenger cars now carry a 2.5% tariff at the border.

Kantor’s announcement would start the clock ticking on a 30-day comment period. The sanctions would not take effect until after that period, giving both countries a chance to resolve the dispute.

The deadline would not expire until after President Clinton and Japanese Prime Minister Tomiichi Murayama meet at the annual economic summit of the world’s seven richest industrial countries, to be held June 15-17 in Halifax, Nova Scotia.

Presidential spokesman Mike McCurry acknowledged Monday that the Halifax summit played a role in the timing of the proposed sanctions. In the past, the United States has successfully used the annual summits to force deals in protracted trade disputes with Japan.

While the United States has sought to isolate the current dispute from broader security issues in the Pacific region, McCurry warned that failure to resolve it could harm overall relations between the world’s two largest economies.

Referring to the sanctions list during his weekly radio address Saturday, Clinton said, “We are prepared to act, and we will act soon if we must.”

In addition to the sanctions, the Administration announced last week that it is prepared to bring a broad-based unfair-trade case against Japan before the new World Trade Organization unless agreement is reached.

Five days of talks on the auto issue ended in failure in Canada on May 5. The United States is demanding that Japan’s auto makers make new commitments to boost their purchases of American-made auto parts for factories in the United States and Japan.

The United States is also seeking an increase in the number of dealerships stocking U.S. cars in Japan, as well as a relaxation of safety rules seen as a barrier to the sale of American auto parts in Japanese repair shops.

The biggest sticking point in the negotiations has been a demand for an extension of the so-called voluntary parts purchasing plans, which the Japanese government has attacked as a smoke screen for numerical targets that Japanese companies would have to meet.

Greg Mastel, a trade specialist at the Economic Strategy Institute in Washington, predicted that in the end, Japanese car companies will accept an extension of the parts purchasing plans rather than risk losing the lucrative U.S. luxury car market.