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How Those Car Tariffs Could Backfire


Readers Report

HOW THOSE CAR TARIFFS COULD BACKFIRE

I think that the "worst-case scenario" you describe in "Your move, Japan," (News: Analysis & Commentary, May 22) is much too tame. After trade sanctions go into effect, Tokyo could retaliate by cutting its purchases of U.S. Treasury bills and bonds. With the resulting lower demand, bills and bonds would drop in price, driving up yields. The last thing that America needs--with its high rate of government borrowing, slowing economy, and overextended stock market and bond market--is rising interest rates.

I believe we should go to the World Trade Organization without imposing the sanctions. We don't risk losing any U.S. jobs in the meantime.

Moreover, it is ridiculous to require another country to buy our products. Washington needs to remember that competition is our policy. If Americans don't want Japanese goods sold here, we need to produce products that will provide better value and thus will persuade American customers to choose them.

Rick Zbavitel

Fallbrook, Calif.

Your lead article and the editorial "Don't back down on Japan now" said much about the Japanese auto market, which is supposedly closed. From my view, cars should not be on the agenda.

When I moved to Tokyo more than two years ago, I was disgusted with the pitiful effort of American auto makers in Japan, especially after hearing all the U.S. complaints about barriers. Not only were they trying to sell vehicles too large for Japan's narrow streets but also left-hand-drive cars in a country where they drive on the left.

American companies are slowly improving their strategy and quality. But in businesses such as auto parts, they need to remember it is necessary to "get in bed" with Japanese companies if they want to be preferred suppliers. European carmakers, who have had more success in Japan, would laugh at American efforts.

Mark Foley

University of Tokyo

Research Center for Advanced

Science & Technology

Tokyo

On trade issues, BUSINESS WEEK seems to be too fixated on the need for the U.S. to "beat" Japan. Your magazine downplays the disaster that will surely come from any major disruption in world trade.

A Lexus sold in the U.S. brings benefits not just to Toyota Motor Corp. of Japan but also to the American dealer, the American parts makers who supply components for the cars, and, of course, the American buyer who supposedly chose the car because of its quality.

Is anyone ready to argue that American carmakers try as hard in Japan as Toyota and the others do in America? From an international perspective, it seems that America is trying to get by force what it could not get by ordinary effort. You are good winners (microprocessors, PCs, and software) but very poor losers (automobiles).

John De Hoog

Tokyo


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