Advisers Calling For Sanctions Clinton Urged To Boost Tariffs On Japanese Autos, Parts

With trade talks between the United States and Japan at an impasse, President Clinton’s advisers recommended Saturday that he impose a series of sanctions intended to pressure Japan into opening its market to U.S. automobiles and auto parts.

The proposal, sent to Clinton after a closed-door meeting of his National Economic Council, endorses measures that would make it more difficult for Japan to sell automotive products in this country, according to sources close to the negotiations and the auto industry. The list of potential targets is said to include luxury automobiles, minivans and auto parts.

The council, which consists of Cabinet members and other senior presidential advisers dealing with economic issues, quickly reached unanimous agreement on the steps, U.S. Trade Representative Mickey Kantor said.

“There was a very strong consensus in that room,” Kantor said in an interview.

Administration officials declined to make an on-the-record announcement of the council’s specific recommendations, or to confirm that sanctions are among them. One official cautioned that changes could yet be made and that the president is not bound to accept all the recommendations.

Clinton’s determined

But the officials portrayed the president as determined “to move the situation forward” with a series of steps designed to help U.S. companies sell more automotive products in Japan.

“The president is very determined in this matter. This administration will act decisively,” Kantor said after flying to Washington from Canada to take part in the council meeting. The talks with the Japanese ended Friday evening in British Columbia.

Sen. Carl Levin, D-Mich., whose state’s economy depends heavily on the ability of the U.S. auto industry to compete with Japan, said he discussed the matter with Clinton on Friday when the president visited Michigan. Levin said he was assured that the president is “prepared to do what no other administration has done for 25 years: tell Japan that it faces restrictions on its goods if it doesn’t open its market to our autos and auto parts.”

The Japanese auto industry fears that the U.S. move could bring tariffs, or import taxes, of up to 100 percent on Japanese luxury cars and some Japanese auto parts sold in the United States. The sanctions potentially could double the prices of those products, making it nearly impossible to sell them at prices competitive with top-of-the-line models from Europe and Detroit. The current import duties on the vehicles, sold for $30,000 and up, are 2.5 percent.

A list of potential sanctions, including tariffs on up to $1 billion in annual imports, was prepared in April before the latest round of talks. Seeking to increase the pressure on Japan, administration officials said they made it clear to Japanese negotiators that they were prepared to impose the tariffs if the negotiations failed.

Administration officials predicted that Clinton, who leaves Monday for a weeklong visit to Russia and Ukraine to mark the 50th anniversary of the end of World War II in Europe, will act quickly.

Previous sanctions

The stalemate between the United States and Japan brings to a new level longstanding tensions between the two gigantic trading partners.

If the United States imposes sanctions on auto products, it would be the first time it attacked the centerpiece of the trading relationship. Japanese sales of automotive products in the United States - cars, trucks and parts - account for nearly two-thirds of the $65.7 billion trade surplus Japan ran up with the United States last year.

In a lesser confrontation in the 1980s, the United States imposed sanctions on the import of Japanese electronic goods, a step that led to an agreement that eventually boosted the sales of U.S. semiconductors in Japan.

Sharply critical of the direction in which the administration appears to be headed, the Japan Automobile Manufacturers Association said that rather than accepting an agreement with Japan, the administration has chosen “the dangerous and irresponsible path to a trade crisis.”

“Today the protectionists are celebrating, but tomorrow American consumers will suffer,” said William C. Duncan, the general director of the association’s Washington office.

Japanese Prime Minister Tomiichi Murayama said his government “did all it could to settle the issue in line with international rules.”