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NewsJune 5, 1995

Now that trade talks with the Japanese are halted until June 20, U.S. dealers marketing Japanese cars can't do much more than hope a trade war doesn't explode. Feeling the Japanese auto market is all but closed to American exports, the Clinton administration has threatened to level a 100 percent tariff on some Japanese luxury cars, including the Acura, Lexus, Infiniti, Mazda 929, Millenia and Diamante...

HEIDI NIELAND

Now that trade talks with the Japanese are halted until June 20, U.S. dealers marketing Japanese cars can't do much more than hope a trade war doesn't explode.

Feeling the Japanese auto market is all but closed to American exports, the Clinton administration has threatened to level a 100 percent tariff on some Japanese luxury cars, including the Acura, Lexus, Infiniti, Mazda 929, Millenia and Diamante.

If no agreement is reached, the sanctions will take effect June 28 and be retroactive to May 20. Cars that sold for $35,000 will jump to around $50,000.

Unlike in metropolitan areas, where a dealership may have only Acuras or Infinitis, Cape Girardeau-area car dealers keep several models on hand. They won't be hit as hard by the war, but some experts predict everyone will feel the ripple effects.

Walter Huizenga, president of the American International Automobile Dealers Association, has been busy with newspaper interviews and television appearances as the nation keeps an eye on auto trade. He said all Americans should be interested, whether they drive a Japanese luxury car or not.

Huizenga pointed to a printer in Chicago who does direct mailings for dealerships there. Without them, his business will close. Several other businesses are supported by car dealerships, too.

"I continue to operate on the belief that the matter will be worked out," Huizenga said. "I can't begin to even think about what happens if it isn't. Somebody has to stop this."

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In Cape Girardeau, Wieser Honda-Mazda doesn't carry Acuras but has the lower-priced 929s and Millenias. Owner Jerry Wieser predicted he would lose three or four sales a month over the sanctions.

"They aren't the bread and butter of our business anyway, but it will hurt the single-line stores," he said. "They will have to close, and a lot of them invested in new buildings to get the dealerships."

Mike Smith Mitsubishi in Paducah, Ky., will lose its Diamante business, but the owner said he only sold six of them a year. In another year, the Diamante plant will be in the United States and won't be subject to trade sanctions.

Officials at TG (U.S.A.) in Perryville, which produces parts for Toyota and Mitsubishi, aren't happy with the threatened sanctions. Toyota makes five models of the popular Lexus, a car that would be affected by the sanctions.

One of the manufacturing company's vice presidents, Glenn Graham, wrote Rep. Bill Emerson and Sens. John Ashcroft and Kit Bond objecting to the idea of sanctions.

"If the whole situation keeps going as it is, there will be an all-out trade war," Graham said. "Our business will be affected somehow. If our Japanese customers have less to sell, they will buy less of our product. It doesn't make sense."

TG (U.S.A.) employs 700 people, and 93 percent of its whole materials come from other U.S. companies. The company also sells parts to Chrysler, Ford and GMC.

The AIADA, Huizenga's organization, wants the Clinton administration to take the U.S.-Japan trade dispute before the World Trade Organization for resolution before imposing sanctions. One of WTO's roles is to resolve such issues.

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