Robert S. Strauss, who was special trade representative under President Carter, today defended the Reagan administration's inability to settle the dispute with Japan over imported cars and warned against the rising tide of protectionism.

Strauss, addressing the 44th Chicago World Trade Conference, said the administration shouldn't be criticized for failing so far to solve the import question or for having an understandable split in the Cabinet over the problem.

"Every man, woman, and child is an expert on the need for restraints to protect American jobs and industries," Strauss said."But few realize that most restraints work directly against consumers and that they impact adversely on our national economy at great cost when primarily the emphasis is on trying to deal with inflation."

In addition, Strauss said the U.S. is "not the only nation worried about its domestic automobile industry.

"Every industrialized nation is now trying to deal with the adjustments required by oil embargos and price hikes, economic nationalism and state ownership of industrial enterprises and the role of Third World nations as essential sources of energy and materials," Strauss said.

Nearly everyday Strauss said he reads about the problems of the Reagan administration in deciding the auto import question and other trade issues. "The answers aren't easy," Strauss said.

"When we consider trade actions we can take as a response to the Japanese, we should bear in mind that many Europeans view our success in penetrating their markets in a similar light," Strauss continued. "Trade restraint is a two-way street and a very, very dangerous one that must be traveled through. Actions we take to protect our domestic markets may encourage others to do the same thing to keep out our products."

The first step toward improving trade is in revitalizing the domestic economy, Strauss said. "First we must put our own economic house in order, a process that must include our realizing that economic, political and military security are one and the same," Strauss said.

Sen. Charles H. Percy (R-Ill.), chairman of the Senate Foreign Relations Committee, addressing the group by telephone from Washington, "a world of increasing trade protectionism would be an expensive and dangerous one for the United States."

Percy, without directly addressing the Japanese car import question, added later that he didn't pretend to have the complete answer to the problem of disruptive imports. "There are times when it is sufficient to insist on fair trade practices and there are times when we must ask our trading partners to restrain imports simply because we cannot adjust fast enough to their more efficient production.

"But surely protectionism offers no general answer to our trade dilemma," Percy continued. "If we want others to buy from us, we must buy from them."