U.S, -Japan Trade War: The Opening Battle

Publication Date: April 1987

Publisher: Heritage Foundation (Washington, D.C.)

Author(s): Edward L. Hudgins

Research Area: Trade

Keywords: Trade and foreign aid

Type: Report

Coverage: Japan


For the first time since World War II, the U.S. has retaliated against Japan for alleged unfair trade practices. Specifically, the Reagan Administration charges that Japan has not complied with a bilateral August 1986 agreement, which would prevent Japanese businesses from selling certam semiconductor computer chips in third countries for less than their cost of production, a practice known as "dumping." In addition to the dumping charge, the Reagan Administration maintains that the Ja anese government has failed to permit U.S. firms to win more than a 10 percent share of the Japanese chip market. To retaliate against these alleged ractices, the Administration has placed 100-percent tariffs on some $300 million worth of Japanese imports, effectively keeping many of these goods out of the U.S. market.