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President Nixon in 1968 promised protection to the politically powerful Southern textile industry. Two months ago, the Japan Textile Federation offered to limit shipments to the U.S. for three years starting July 1; they would rise only 5% the first year and 6% in each of the next two years. Those limits were not stiff enough to satisfy U.S. trade hawks, and Nixon turned the offer down. The President then further tangled the textile situation by mixing it up with international politics. He decided to submit to the Senate a treaty returning Okinawa to Japan, rather than handing it back by administrative action as he had led Tokyo to expect. If the Southern textile bloc can sew up 34 Senate votes, it can defeat the treaty. Okinawa is such an emotional issue in Japan that a defeat could topple Prime Minister Sato's government.
As the political snag over textiles shows, the dangers of a U.S.-Japanese trade split go far beyond economics. Japan has been the greatest force for postwar stability and progress in Asia, largely because its industrialists have channeled the vigor of the Japanese people into peaceful pursuit of markets. If that Japanese trait is denied commercial expression, it could explode in frustration. Averting a U.S.-Japanese blowup will require a much deeper understanding of the nature of the friction than either side has shown so far. Many Japanese leaders play down the American resentment as being largely a consequence of the 1970 U.S. recession, and they figure that it will fade as business continues to revive. Even Sony's Morita, who knows the American mind well enough to have outguessed some U.S. marketing men as to what products would sell well, takes that line. "I have been a salesman for 20 years," he says, "and I know that whenever a salesman's customers do not want to buy, he starts blaming someone else."
In fact, the U.S. reaction reflects more than pain in the pocketbook. American executives are enraged by what they regard as Japan's refusal to observe the rules of the game of world trade. Many American businessmen contend, with some justification, that the Japanese dump not only TV sets but also steel, textiles, float glass and radio tuners. U.S. industrialists also complain bitterly (and enviously) about the special help their Japanese rivals get from the Tokyo government: official blessings for cartels formed to win big foreign orders, lavish and extensive government-financed studies of which overseas markets might be easiest to crack, low-interest loans to exporters from the government-dominated banking system, and the lowest corporate taxes in the industrial world.
Most of all, Americans are incensed by the way that Japan, while invading foreign markets, has closed its domestic economy to many foreign goods and most foreign capital investment. Supposedly, that situation is changing. In 1969, Tokyo maintained quotas or other barriers against 120 categories of imports. Last January, the number was cut to 80, and this month it is supposed to go to 60; the Japanese have pledged to reduce it