Senators pressure President to play hardball on trade. House warns Japan, urges White House to alter policy
Sen. John Heinz is philosophical about a possible loss when his office softball team plays the Japanese Embassy. ``That would just be business as usual,'' the Pennsylvania Republican says of his newly renamed team, the ``Buy Americans.'' ``But at least we will have been in there fighting.''
His comment is aimed at more than office softball. Senator Heinz and a growing number of his colleagues from both parties are trying to prod President Reagan into playing serious hardball in trade policies with Japan and other countries.
When they return this week from celebrating July Fourth, the lawmakers are expected to continue filing bills on US trade, already numbering 70. All would either urge or require the President to act to improve the sagging trade balance, which has turned the United States into a debtor nation for the first time since 1914. Some of the bills could win passage despite Reagan opposition.
For Heinz, the concern about trade is multiplied. He has watched his state's steel and other heavy industries shrink with the influx of cheaper imports. Moreover, as chairman of the National Republican Senatorial Committee, he has 22 GOP Senate seats to defend next year.
Kevin Phillips, a conservative commentator, sums up White House trade policies with the single word ``vulnerability'' and adds that the lack of an overall international economic policy may be the administration's ``political Achilles' heel.''
A bipartisan conclusion on Capitol Hill is that the Reagan administration has done little to solve the trade problem. Nor has it taken action to reduce the high-priced dollar, which adds about 40 percent to the amount foreigners pay for American exports.
The trade imbalance ``could hurt the President,'' says Heinz, but he contends that the GOP senators would not be hurt. Like him, many are staking out their own trade policies and departing sharply from the Reagan line. While the President has pointed to a growth of more than 7 million new jobs since 1980 as proof that the country is prospering, Heinz points to the cloud inside that silver lining.
``Virtually all are in the service sector,'' he says, pointing out that service jobs generally pay less than industry jobs.
``I don't think the President realizes the degree to which de-industrialization is taking place in the US,'' Heinz says.
In pockets all over the US, workers are feeling the effects as imports increase and exports decline. For example, in tiny Osceola, Ark., two textile mills closed in a single day because of cheaper imports. Nearly 1,000 people lost jobs.
Some US industries are losing out to imports because plants are outmoded and workers paid far more than those abroad. But defenders of US industry charge that many countries follow unfair trade practices and block US sales abroad.
A group of House members from the Midwest and Northeast last week gave Japanese Prime Minister Yasuhiro Nakasone a stern warning about the trade deficit with his country, which has shot up from $3 billion in 1980 to an expected $45 billion to $50 billion in 1985.
The six-member delegation told the Japanese leader not to be misled ``into believing that congressional anger will dissipate and that no retaliatory legislation will be passed.'' Their personally delivered letter was signed by House Speaker Thomas P. O'Neill Jr. (D) of Massachusetts and Republican leader Robert H. Michel of Illinois.
Until now, Congress has faltered when it comes to providing a clear response to the trade problem. Democrats, who have spotted the issue as a chink in the Reagan armor, have failed to rally around a single solution or to exploit the issue politically with success. ``There is a lot of agreement about what is wrong,'' says Heinz. But there is ``none about what to do.''
Heinz would impose a surcharge on Japanese goods as a sign that the US will act instead of merely complain. Other proposals would protect individual industries, such as textiles, footwear, wood, and agriculture.
Rep. Sam Gibbons (D) of Florida has proposed a duty to counter some foreign subsidies, but he has also halted much protectionist legislation in his Ways and Means subcommittee on trade. ``We've got some dangerous legislation pending,'' said the subcommittee chairman at a recent breakfast with reporters. He said that protectionism in the US would hurt sales of American goods abroad.
Howard F. Rosen, an economist at the Institute for International Economics, says, ``If Congress really wants to do something about the trade problem, they'll do something about [budget] deficits.'' That step would cause a lower US dollar and a better trade balance, according to many, but not all, experts.
Making Japan a target would not help much, Mr. Rosen warns, since the US has problems with other trading partners.