President Reagan is expected to accuse Japan of "dumping" sophisticated computer memory chips at less that the cost of producing them in an effort to gain a large share of the U.S. market, administration sources said yesterday.
The presidential action against Japan on 256K random access memory (RAM) semiconductors follows the recommendations of an administration "strike force" to root out unfair trade practices harming American companies, U.S. Trade Representative Clayton Yeutter told wire service reporters yesterday.
He said the president had delayed bringing the complaint against the Japanese makers of 256K chips in hopes that negotiations could settle a series of complaints by U.S. high technology companies against Japan's trade practices. Yeutter said the presidential action could come this week.
Memory chips are tiny silicon wafers that store data, and the 256K chips, which hold more than 256,000 pieces of information, are vital parts of both personal and many mainframe computers. U.S. and Japanese manufacturers are locked in a bitter struggle for market share for the next generation of memory semiconductors, although Japan has captured an overwhelming majority of the 256K chip market.
The Commerce Department issued a preliminary finding Tuesday that Japanese companies are dumping a less sophisticatred chip, the 64K dynamic random action memory semiconductor, in the United States. If that finding is upheld, penalty duties ranging as high as 95 percent of the cost of the chips will be assessed against the Japanese-made chips.
The 64K dynamic random action memory complaint was brought by Micron Technology Inc., a Boise, Idaho, chip maker, whose president, Joseph L. Parkinson, said the Commerce Department finding -- which forces Japanese companies to deposit bonds with the government equal to the duties that could be assessed -- was the first significant U.S. move toward placing tariffs on Japanese semiconductors.
In another indication that the Reagan administration is toughening its stance against Japan on trade issues, the government is considering limiting Japanese sales of high technology fiber optics in retaliation for Japan's restriction on U.S. imports of leather products.
Japan has refused to open its markets to foreign leather products despite a finding by the General Agreement on Tariffs and Trade (GATT), the international body that regulates trade, that its practices violate trade rules. Leather is a highly protected industry in Japan, largely because the work is done by a small but politically potent clan.
Yeutter also told wire service reporters that the White House is drafting a veto message for legislation passed Tuesday that would sharply limit imports of textiles, shoes and copper. While the president has said nothing about the bill, administration aides around the world yesterday underscored the view that the bill is virtually certain to be vetoed.
Yeutter called the measure "flagrantly protectionist," and urged Congress to pass a bill early next year that would reform trade laws instead of protecting individual industries.
With the textile bill behind them, Congress is likely to do just that. Several comprehensive bills already have been drafted, and Chairman Dan Rostenkowski (D-Ill.) promised Tuesday that the House Ways and Means Committee will take up trade legislation early next year. On the Senate side, Majority Leader Robert J. Dole (R-Kan.) said he would clear floor time for trade legislation early in the year.
Yeutter said the administration is studying the different bills to identify parts of the legislation that it can support and next year will work with congressional leaders to craft a major, bipartisan piece of trade legislation.