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The measures amounted to little more than a blip on the gargantuan volume of annual U.S.-Japanese trade, which totaled $112 billion last year. But the slap at Tokyo was also a powerful diplomatic message. For the first time, longstanding American grievances over the trade practices of its second largest trading partner (after Canada) had resulted in a sharp and pointed U.S. economic response. Said a senior Administration official: "This will hopefully send a signal to all our trading partners that the free ride is over." As Commerce Secretary Malcolm Baldrige put it to TIME, "You can't rely on words. You have to rely on actions."
Those actions may soon provide some trying moments for two men widely touted as close personal and political friends: Ronald Reagan and Japanese Prime Minister Yasuhiro Nakasone. The two statesmen are scheduled to meet in Washington on April 29, and the new strain in their relationship comes at a time when both leaders face serious political troubles. At home Nakasone is currently fighting an uphill battle for political survival. The U.S. sanctions were an added burden that could help force him out of office before his term expires in October.
For Reagan, weakened by the Iranscam scandal, the sanctions were an unprecedented gamble. On one hand, they expressed the Administration's "profound disapproval" of Japanese trading practices in the sensitive semiconductor field. On the other, they were an integral part of the Administration's strategy to address the country's ghastly trade deficit. The semiconductor measures were also intended, ironically enough, to help block a rising protectionist tide in the U.S. Congress, but they could just as easily have the opposite effect.
The sanctions actually cheered legislators who are preparing a new version of a tough omnibus trade bill that passed the House of Representatives last year but died in the Senate. One version of the new bill is expected to reach the House floor on April 28, the day before Nakasone's visit. Says Senator Max Baucus of Montana, a leading congressional activist on trade issues: "The President's semiconductor action is sort of a turning point. We're going to stop talking and start taking action."
The clash over microchips also went far beyond commercial concerns in pitting two vastly different cultures against each other. After more than 130 years of contact with the West, Japan is hard-working, thrifty, highly organized but still relatively insular in its world view. On the other hand, free-wheeling, free-spending and individualistic America is now becoming fully aware of the loss of its postwar industrial primacy. By its latest trade actions, Washington was clearly attempting to force Tokyo to change not only its outlook but also its historic attitudes. For the Reagan Administration, and indeed for America, the issue of protecting high-tech industries went beyond economics and politics to national pride. Long the world's technological leader -- and still in many respects the world front runner -- the U.S. was fighting hard to protect that role.