Japanese trade fight alarms dealers

May 18, 1995|By Alec Matthew Klein and Melody Simmons | Alec Matthew Klein and Melody Simmons,Sun Staff Writers

Amid the bluster over trade sanctions between the U.S. and Japanese governments, one panicky consumer decided to take real action yesterday: He called Frankel Acura in Cockeysville and bought a $30,000 car over the phone, before impending tariffs add tens of thousands of dollars to the sticker price.

It was just one of a spate of phone calls to import dealers in the area yesterday as prospective customers sought to find out whether the escalating trade fight would interfere with their plans to buy an expensive car.

The Clinton administration has targeted 13 Japanese luxury models for 100 percent tariffs -- sold under the Acura, Lexus, Infiniti, Mazda and Mitsubishi nameplates -- to persuade Japan to open its markets to U.S. automakers.

The tactic has not only scared customers here and enraged the Japanese overseas, but could also put thousands of Americans out of work, say some involved in the import industry in the United States.

"We would like to move away from the brink of this trade war," said Philip A. Hutchinson Jr., president of the Association of International Automobile Manufacturers Inc., a trade group that represents U.S. subsidiaries of foreign automakers. "There's a lot of machismo involved on both sides of this, but I think we have to take at face value what's been said."

More than 2,000 U.S. auto dealerships would be affected by the sanctions, according to the manufacturers association. And more than 80,000 jobs -- just at the dealerships -- are imperiled, said Lori L. Weaver of the American International Automobile Dealers Association.

"It's just the starting point," she said. "We're going to see a ripple effect across the industry. The U.S. government is making a terrible mistake."

Some of the ripples will reach the port of Baltimore, through which three of the 13 targeted automobiles -- the Acura Legend, Acura 3.2 TL and Mitsubishi Diamante -- are shipped. A port spokesman said those models make up only a tiny fraction of the nearly 200,000 import vehicles the port handles in a year.

"At this point, by the models they've targeted, it doesn't constitute a large volume for us," said Jim Gring, spokesman for the Maryland Port Administration. Area import dealerships were less sanguine.

"The issue here is that the American consumer is going to be hurt," said Bob Frankel, president of Frankel Acura. "About 80,000 to 100,000 people will be affected by this in the U.S. Then multiply it by their families. . . . The Clinton administration is going after the rich, and that's wrong. What they are doing now is not thought through."

While U.S. and Japanese emissaries are duking it out, dealerships like Len Stoler Lexus in Owings Mills have suddenly found themselves fielding customer questions not only about gas mileage but also about tariffs on their cars, which range in price from about $30,000 to $52,000.

The threatened U.S. sanctions are scheduled to become official, retroactive to this Saturday, on June 28.

"This is largely inspired by politics," said dealership owner Len Stoler. "I hope that once Japanese and American politicians flex their muscles to prove to their own constituencies that they know how to play politics, that some compromise will be reached. People are hopeful that a solution can be worked out." If not, buyers are likely to work out their own solution, Mr. Stoler predicted: Some Lexus customers may simply shop for foreign cars unaffected by the tariff.

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