May 20, 1995 in Nation/World

Car Dealers Seeking Help From Congress Sellers Say Proposed Tariff Would Force Many To Close

Associated Press

Sellers of Japanese luxury cars are asking Congress to prevent U.S. sanctions against their products, contending the trade action would put many of them out of business and endanger 81,000 American jobs.

“Many dealers won’t last 60 days” if the Clinton administration imposes a 100 percent tariff against 13 Japanese models in its trade dispute with Tokyo, Walter E. Huizenga, president of the American International Automobile Dealers Association, said Friday.

Huizenga said the tariffs doubling the prices for nearly $5.9 billion in Japanese autos would threaten 2,028 U.S. dealerships.

“These guys would be dead in the water,” he told reporters at a news conference.

Affected would be five models of the Toyota Lexus, three of the Nissan Infiniti and two of the Honda Acura, as well as Mazda’s 929 and Millenia and Mitsubishi’s Diamante. The models now cost between $25,000 and $50,000.

The duties go into effect today, although they will not be collected until June 28 to give both sides more time to resolve the conflict over U.S. complaints that the Japanese market is closed to U.S. cars and auto parts.

Huizenga said 850 dealers attending the association’s convention here will ask their lawmakers next week to pressure the administration to let the new World Trade Organization resolve the dispute.

Both the U.S. and Japanese governments have announced they would file unfair trading complaints against each other with the Genevabased WTO, which was created last year with a mechanism to resolve trade disputes.

Huizenga contended the WTO eventually will rule on the dispute.

“The only thing remaining is who is going to be hurt in the interim” by the U.S. sanctions, he said.

Huizenga claimed that only 200,000 of the 16 million Japanese automobiles manufactured annually would be affected by the sanctions and that many of them could be offered for sale in Europe.

The manufacturers thus would not be submitted to “a terrible amount of pain,” he said. But U.S. dealers would feel the pain immediately because of their high overheads, borrowing costs and narrow profit margins.

© Copyright 1995 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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