ROANOKE TIMES 

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, May 17, 1995                   TAG: 9505170090
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: From Cox News Service and Hearst Newspapers
DATELINE: WASHINGTON                                LENGTH: Medium

STICKER SHOCK SET FOR JAPAN

The Clinton administration threatened Japan on Tuesday with the largest peacetime U.S. trade sanctions in history, proposing $5.9 billion worth of punitive tariffs that effectively would price most Japanese luxury cars out of the market.

The 100 percent tariffs on 13 luxury models ranging in price from about $25,000 to approximately $60,000 would take effect June 28 if the 20-month-old trade dispute is not resolved before then. The tariff, or border tax, the United States now charges is 2.5 percent.

The change would double the cars' prices. A $30,000 Toyota Lexus, for example, would cost $60,000. Other high-end models affected would be the Honda Acura, Nissan Infiniti, Mazda 929 and Millenia, and Mitsubishi Diamante.

Japan denounced the U.S. action as illegal, refused to negotiate under threat of sanctions and vowed to immediately take the issue before the World Trade Organization, a sort of global trade court.

President Clinton and Japanese Prime Minister Tomiichi Murayama would be able to overturn the sanctions when they meet next month in Halifax, Canada, for the annual summit of leaders from the world's seven richest democracies.

U.S. Trade Representative Mickey Kantor warned that further negotiations would not be enough to defer the penalties, however. Only a ``meaningful, strong and effective'' agreement aimed at increasing U.S. auto and parts sales to Japan would suffice, he said. ``For 20 months, the United States has tried to negotiate strong and meaningful progress in opening up Japan's auto and auto parts markets ... but this problem has persisted for decades and remains,'' he said. Last week Kantor said the White House also planned to bring its case to the World Trade Organization.

President Clinton suggested the auto issue could bruise the two nations' overall relationship, which has been generally friendly.

Over the past decade, American consumers and companies have bought a half-trillion dollars more worth of Japanese products than the United States has shipped to Japan. More than half of that gap has been due to automobiles and parts, and the Clinton administration contends that unfair trading practices are to blame.

``We're asking Japan to play fair,'' said Kantor. ``If we buy their products, they should buy our products. That's the kind of reciprocity that we need in a new world trading regime.'' 


 by CNB