The White House reversed itself yesterday and dropped objections to Commerce Secretary Malcolm Baldrige's plan to penalize imports of future generations of Japanese semiconductors if the government finds that Japan now sells the computer memory chips for less than their market value.
Commerce Public Affairs Director B. Jay Cooper said that a notice of the investigation of possible unfair trade tactics by Japanese semiconductor makers, which White House aides held up Friday, will be published as originally written in the Federal Register this week.
The announcement extends the investigation beyond the present generation of 256K memory chips to ones that "are likely to be sold in the United States at less than fair value."
Memory chips are a key element of computer and telecommunications systems. Although the United States once dominated world and domestic markets, Japan took over the sales leadership for the current generation of 256K chips and is threatening to expand that lead to semiconductors still on the drawing board.
The Commerce investigation is the first initiated by the government. But Japanese semiconductor trade tactics are under attack by U.S. companies that have filed complaints charging Japan with "dumping" chips in the United States, that is, selling them below the cost of production -- while refusing to allow American sales in its market.
The issue is critical to the U.S. industry, which has been beleaguered by the combination of aggressive Japanese sales and a soft computer market.
White House aides last week objected to the possibility of penalizing imports of future Japanese chips and accused Baldrige of overstepping the authority given him by President Reagan to initiate an investigation of possible unfair trade tactics by Japanese semiconductor makers.
Baldridge, who just returned from meetings last week in Moscow and Brussels, challenged that view at meetings with White House aides yesterday and over the weekend. "The White House backed down," an administration official said.
"He had the authority he used. It's right there in the law," Cooper added.
The White House action to narrow the scope of possible penalties followed a strong lobbying campaign last week by lawyers and representatives of Japanese companies. One lobbyist, attorney William Walker, said Baldrige was "excessively aggressive" in announcing the investigation -- the first one the government has intitiated against Japanese high-technology interests.
Baldrige told wire service reporters he doesn't think Reagan will "succumb" to the heavy Japanese lobbying tactics.
Later, Cooper said, "I don't think the 5,000 American workers who have lost semiconductor jobs this year would agree with the Japanese lobbyist who was quoted as calling the secretary 'excessively aggressive.' "
"If the Japanese semiconductor industries are not dumping, they have nothing to fear from the investigation," he added. "If they are, they should have to pay penalties the same way industries in other countries do."
The investigation was the first recommendation of the "strike force" established by Reagan to root out and attack unfair trade tactics.