U.S.-JAPAN TRADE SHOWDOWN : March Deficit With Japan Surges 30% : Commerce: $6.1-billion figure, the highest in four months, adds fuel to Washington’s tough stance on tariffs for luxury cars.

The U.S. trade deficit with Japan jumped 30% to $6.1 billion in March, the Commerce Department reported Thursday, giving more ammunition to the Clinton Administration for its tough line in imposing punitive tariffs of 100% on Japanese luxury cars.

The massive deficit figure provides strong evidence that “markets remain closed in Japan and Japan continues to ship products into our market,” U.S. Trade Representative Mickey Kantor said.

The United States is “concerned that the deficit would grow given the exchange rate situation,” which should have helped the trade figures, Kantor said. The steady weakening of the dollar this year in relation to the yen makes U.S. products cheaper for Japanese customers while raising the cost of Japanese goods for Americans.

The deficit with Japan, climbing sharply from $4.7 billion in February, was the highest in four months--since a $6.2- billion shortfall in November. The record level of $6.7 billion was set in October.

Despite the surging imbalance with Japan, the nation’s overall trade deficit held steady in March at $9.12 billion, a slight decline from $9.15 billion in February.

The United States announced Tuesday that it will impose a 100% import tax on 13 Japanese luxury cars to generate pressure on that nation to open its markets for U.S. autos and auto parts.

The tax will be imposed on vehicles entering the United States after today. But the money will not be collected until June 28--giving trade negotiators breathing space to try to settle the dispute.

Trade experts and others who have seen the United States and Japan go to the brink before, only to pull back from a trade war, hope a compromise can be reached. The 100% tax is scheduled to be imposed on five models of the Toyota Lexus, three models of the Nissan Infiniti, two high-end Mazda models, two of Honda’s Acura models and the Mitsubishi Diamante.

“The ball is in Japan’s court,” Kantor said. “If they wish to have a meeting, we would be willing to listen to what they want to talk about.” But there are no meetings scheduled, he said.

“Our position is clear,” Kantor said.

Japan sent $10.4 billion in autos and auto parts to the United States in the first quarter of this year, while importing only $1 billion in U.S.-made auto products. In an effort to keep their share of the lucrative American market, Japanese companies are selling their cars here at lower prices than in Japan, Kantor said.

The U.S. trade deficit with Mexico, although much smaller than the perennial Japanese problem, rose to $1.71 billion, up sharply from $1.3 billion a month earlier. The decline in the value of the peso has spurred imports from Mexico.

The gap between imports and exports in the first quarter was $30.2 billion. If the current pace holds up, the United States will post a deficit of $121 billion in 1995, a sharp increase from last year’s deficit of $107 billion.

In addition to auto parts, the United States is importing large volumes of crude oil, semiconductors and telecommunications equipment. Major exports include civilian aircraft, semiconductors, industrial machinery and electric equipment.

* RUSH IS ON: Luxury car deadline draws buyers. D2

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Growing Gap With Japan

While the overall U.S. trade deficit shrank slightly in March, the deficit with Japan grew by 30%. Monthly deficit figures, in billions of dollars:

March 1995

Deficit with Japan: -$6.14

Total deficit: -$9.12

Source: Commerce Department, Datastream