Car duty call will be real test: Rupert Cornwell reports from Washington on protectionist pressure in the motor industry

Click to follow
THE swingeing steel tariffs have caused worldwide alarm that a new protectionist mood is afoot in Washington.

But a far clearer test of the Clinton administration's views on trade will be a demand for punitive duties on every imported car, about to be presented by the ailing US motor industry. That would involve tariffs on imports worth dollars 44bn (pounds 29bn) annually. By contrast, steel shipments to the US amount to just dollars 1.5bn.

Despite the international uproar, Wednesday's steel ruling was essentially a holdover from the Bush era, which the new administration had no power to stop. It was 'a mandated procedure, not a policy statement', Ron Brown, the new Commerce Secretary, said in a special statement accompanying the decision.

Pointers abound that the new president may stiffen the generally laissez faire approach to trade of George Bush. Any Democratic administration is more ready to listen to its natural constituency of organised labour, as it demands more protection of American jobs. Huge cuts being forced upon struggling corporations like IBM, Westinghouse and Boeing suggest big business too could favour stronger moves against perceived unfair practices by foreign competitors.

Bill Clinton has made it clear he sees international economic affairs as an integral part of national security. His chief economic adviser, Laura Tyson, is an unabashed advocate of government support for hi-tech sectors, and if neccessary 'managed trade' to foster their growth.

Although he has given few clues, Mickey Kantor, the new and untried US trade representative, is expected to take at least as tough a line as his Republican predecessor, Carla Hills.

The new administration's strategy will become plain from its stance in the Gatt and North American Free Trade Area (Nafta) negotiations. Further signs will come when Sir Leon Brittan meets Mr Kantor in Washington next month. Nothing, though, will be as revealing, or as potentially explosive, as the gambit from Detroit.

The big three car makers are already trying to persuade the Commerce Department to re-classify 'sport utility vehicles' (including Range Rovers from Britain) as light trucks, which would subject them to higher duties.

GM, Ford and Chrysler are not confirming their plans. But they are known to have prepared preliminary documents and enlisted big Washington law firms to press the case. The companies will try to prove that foreign cars are being sold here for less than in their domestic markets.