The weakening dollar presents both a potential trade problem and opportunity for U.S. manufacturers, according to American business leaders who met here earlier this month.
The problem is that auto companies such as General Motors Corp., Ford Motor Co. and Chrysler Corp., with their extensive import agreements with Japanese partners, could wind up paying more for the cars and parts they get from overseas.
The opportunity is that, should Japanese and West German currencies continue their strength against the dollar over the next year, American manufacturers of all types could increase their export sales, the business leaders said.
The imbalance in trade between the United States and its international partners, reflected by America's net export deficit, already is swinging in favor of this country as the result of the dollar's decline, according to an analysis released here by the Business Council.
"After having dragged the U.S. economy down for so long, the deficit in net exports should finally shrink in 1986," the council's analysis said. America's trade deficit has dropped to $126 billion in the first quarter of this year from $140.8 billion in the fourth quarter of 1985, it said.
The deficit should move downward to $107.44 billion in the fourth quarter of 1986 and to $84.8 billion in the fourth quarter of 1987, it added.
"The improvement stems principally from the sharp declines in the dollar against the currencies of Japan and Germany . . . ," the council's analysis said. "But the still large negative balance in net exports . . . represents a chronic trade problem for the U.S.
"Considerable time will be required before the United States can become competitive again [in export sales], after having lost so much market share to the rest of the world," it said.
"These trade swings don't come that fast," said Roger B. Smith, GM's chairman. "The lower dollar is helpful" in stimulating U.S. exports. But "it will take a while" before the United States moves from a net export deficit to a break-even point or a surplus in trade, he said.
"Those changes do come somewhat slowly but, in the first quarter this year, in our industry we are seeing substantial exports and overseas volume and a significant improvement in price," said Edmund G. Jefferson, chairman of E. I. du Pont de Nemours & Co., commenting on the weak dollar's influence on trade.
An overall change for the better "won't happen all in the next few months," Jefferson said. But if the dollar remains weak overseas in the next year or two, the improvement in U.S. export activity "will be dramatic," Jefferson said.
But the happy drama on one hand could cause trauma in the other, said Harvey Heinbach, an automobile analyst for Merrill Lynch & Co. of New York.
Auto makers and other manufacturers with overseas buying agreements "eventually could see their costs going up" enough to postpone or cancel their foreign sourcing plans, Heinbach said.
GM this year will import 160,000 cars from its Japanese partners, Isuzu Motors Ltd. and Suzuki Motor Co. Ltd. Chrysler will import nearly 200,000 vehicles from Mitsubishi Motors Corp., and Ford will bring in thousands of parts -- mainly transmission and axle arrangements for front-wheel-drive cars -- from Mazda Motor Corp.
"They may have to put some of those outsourcing plans on hold, or bring in parts and products from places like Mexico, Brazil and Korea, instead of Japan," Heinbach said.