IN LIEU of any better ideas for restraining imports, the Reagan administration is now beating on Asian exporters to raise their prices. Just about everybody agrees that American consumption has to be brought down. One way to do it would be to raise taxes. Another would be to cut federal spending. The budget compromise now in progress will do a little of both -- but only a little. Imposing a hold-down on American consumers is not a prospect that either the White House or Congress finds appealing. Getting foreigners to do it is more congenial.
The new secretary of commerce, C. William Verity, sternly warned the Japanese the other day to get their prices up. He wants them to take fatter profits. Otherwise, he darkly suggested, the United States might start litigation against them for charging too little. While the prices of Japanese goods have been rising in this country, they haven't risen as fast as the Japanese yen. Japanese exporters have been shaving their profit margins to keep their prices down. Secretary Verity wants that stopped immediately.
Similarly, an assistant secretary of the Treasury, David Mulford, urged four other Asian exporters in a speech this week to raise their exchange rates against the dollar. The purpose is to raise the prices of their goods here. President Reagan said last week that the United States does not want to see the dollar's exchange rate decline further. But that view apparently does not extend to the Treasury, which accuses the four -- Taiwan, South Korea, Singapore and Hong Kong -- of keeping their currencies artificially depressed while running large trade surpluses. That, as Mr. Mulford correctly observes, is disruptive to the world trading system. He sees a need for "very large" rises in their exchange rates against the dollar -- meaning very large devaluations of the dollar against them.
How much farther does the dollar need to drop, not only against the Asians' currencies but against all currencies, to balance American trade? The answer depends on policy in this country. If the administration could bring itself to reduce consumption deliberately, trade could be balanced at exchange rates not very different from the current ones. But if there is no change in present policy, the exchange rates will have to fall substantially. The effect would be to curtail consumption by the harsh mechanism of soaring interest rates and severe recession. That's why people in the financial markets are following the wrangling over the budget with such intensity.