March 27, 1987

I am today announcing my intent to raise tariffs on as much as $300 million in Japanese exports to the United States. I am taking these actions in response to Japan's inability to enforce our September 1986 agreement on semiconductor trade. Regrettably, Japan has not enforced major provisions of the agreement aimed at preventing dumping of semiconductor chips in third country markets and improving U.S. producers' access to the Japanese market. I am committed to the full enforcement of our trade agreements designed to provide American industry with free and fair trade opportunities.

Under the agreement, which was negotiated to resolve a series of unfair trade practice cases brought by my administration and American industry, the Government of Japan agreed to prevent Japanese semiconductor producers from selling below cost in markets outside Japan and to provide additional access in Japan for foreign producers. Despite monthly consultations with the Japanese since the agreement was signed and repeated assurances that all aspects of the agreement would be fully implemented, the most recent evidence we have demonstrates that dumping has continued. Moreover, American firms' access to the Japanese market has not improved from last fall's levels.

The Government of Japan has, in recent days, announced a number of actions aimed at improving their compliance with the agreement. I am encouraged by these steps, and that is why we are not terminating the agreement. When the evidence indicates that third-country dumping has stopped and U.S. firms are enjoying improved access to the Japanese market, I am prepared to lift these sanctions.