WASHINGTON -- The Clinton administration yesterday imposed punitive tariffs on more than $1 billion of Chinese goods, the largest trade sanctions in American history, and warned of further action if China's government refused to crack down on rampant piracy of American software, movies, and music.
The decision to impose punitive tariffs of 100 percent on goods as diverse as silk blouses and cellular telephones was met almost immediately by an angry Chinese announcement of tariffs against U.S.-made goods.
The trade confrontation comes at a particularly delicate moment in U.S.-Chinese relations, with disagreements brewing on human rights and arms control as well.
But after several meetings at the White House in recent days on the United States' deteriorating relations with Beijing, administration officials decided that there was no reason to delay sanctions further. Through the first 11 months of 1994, the United States imported $36 billion of products from China while exporting $8.5 billion of goods there.
Each country said that its penalties would take effect on Feb. 26. The three-week delay, a common practice in cases of trade sanctions, is intended to assure that goods shipped before the retaliatory tariffs were announced would not be affected.
The delay also provides a chance for further negotiations; last February, the Chinese struck a deal in a textile dispute on the day when previously announced sanctions were to take effect. But some U.S. trade officials have speculated that the unsettled state of the Chinese leadership may make such last-minute bargaining less likely this time.
American consumers will be among the first victims of the trade dispute, as they are any time the government decides to set a tariff to harm the sales of another country's goods. Under the rules published on yesterday, for example, the U.S. Customs Service would be required to put a $100 tax on every $100 Chinese-made bicycle imported to the United States.
Over the last five weeks, however, U.S. officials have been pruning the list of products selected for retaliation, honing in on goods produced in several other nations as well, so that U.S. consumers could choose, for example, a Japanese or British-made bicycle that is not subject to the tariffs.
They have also avoided products on which the tariffs seemed likely to hurt American business, including two of China's biggest exports here, toys and electronic goods.
Yesterday's action was the culmination of a dispute between the lTC United States and China that has bubbled along for nearly two years, a period in which the administration had set aside serious concerns about human rights in China in the hope of bolstering trade, among other things.
The current dispute has begun to eclipse Washington's long-running trade arguments with Japan. Last year, the U.S. trade deficit with China climbed to $30 billion -- roughly half the size of the deficit with Japan -- and U.S. businesses say that
piracy of American "intellectual property," particularly copyrighted material such as movies and music, has contributed to the imbalance.
The United States has repeatedly demanded, for example, that China close 29 factories -- many of them state-owned -- that are producing 70 million compact disks and videodisks every year, from illegal copies of Whitney Houston's hit soundtrack from "The Bodyguard" to movies such as "True Lies" and "Clear and Present Danger." Those goods can be found all over Asia, from the streets of Hong Kong to many stores in Tokyo.
At a news conference here yesterday, Mickey Kantor, the U.S. trade representative, held up bootleg products purchased around Asia, including knockoffs of the latest version of the Microsoft Corp.'s personal computer operating system and canned foods bearing the label "Del Monte." Mr. Kantor said that after 21 negotiating sessions in the last two years, China still refused to crack down on the production and distribution of such products.
"The Chinese know what they have to do," he said. "They are the third-largest economy in the world, and they can stop this if they want."
China also said yesterday that it would suspend negotiations with American auto makers over the establishment of joint ventures in China to build mini-vans and passenger cars. Getting U.S. car makers into China, as both German and Japanese manufacturers are expanding their presence there, has been an important economic priority of the Clinton administration.
Mr. Kantor made it clear, however, that the list of affected goods had been shaped with an eye toward minimizing the impact on business here. "We have also tried to pick products that are produced by China's state-owned enterprises," Mr. Kantor said. While he declined to go into the reasoning behind singling out those businesses, many of those enterprises are owned by the People's Liberation Army and other government agencies, and their profits have frequently enriched China's leaders and their families.
Administration officials said that they excluded most electronic components from the goods subject to sanctions after U.S. computer makers were told that China was the main supplier of a huge variety of cables and circuit boards for U.S.-made personal computers. Imposing sanctions on those goods, Mr. Kantor concluded, would work to the advantage of foreign computer makers.
Administration trade officials have a variety of theories as to why this dispute is proving so intractable. The most popular centers on the transition in power in Beijing. Several State Department officials say they believe that the intense focus on Mr. Deng's health has distracted the Chinese leadership. They also speculate that some top Chinese leaders, mindful of the price they paid during the Cultural Revolution, do not want to be identified as internationalists -- seeking accommodation with the United States -- until it is clear who will dominate China's leadership.