U.S. to Tax Japan Cellular Phones
WASHINGTON — The International Trade Commission, ruling Tuesday that most Japanese cellular telephone equipment is being sold in the United States at unfairly low prices, ordered duties that will double the price of some Japanese car phones.
The duties will be imposed on most Japanese-made mobile phone equipment beginning Dec. 9 to offset the effect of predatory Japanese pricing in the United States. In aggregate, said ITC Chairman Paula Stern, the guilty Japanese firms are selling their mobile phones for 40% below market value, based on production costs and the price of similar equipment in Japan.
ITC and Commerce Department investigators concluded that only one major Japanese cellular telephone manufacturer, Toshiba, did not “dump” its products--that is, sell them at predatory prices--in the United States.
ITC investigator Lynn Featherstone said the highest duties will be imposed against Matsushita, the giant of the Japanese consumer electronic industry, which was selling its phones in the United States at less than half of their prices in Japan. A 106.6% duty will be applied to Matsushita’s cellular phone products.
Other duties will range from 95.6% for Nippon Electric Co. and 87.8% for Mitsubishi to 9.7% for Okidata and 3% for Hitachi.
Stern, speaking for the commission’s 4-1 majority, said that Motorola Corp. of Schaumberg, Ill., the sole U.S. company claiming injury from Japanese dumping, “is a leader” in the new technology that has spurred sales of cellular phone equipment.
Seized 75% of U.S. Market
But Japanese competitors, using aggressive pricing strategies, already have seized 75% of the U.S. market in this new industry, she said.
Stern, noting that Motorola was not supported in its petition to the ITC by other U.S. manufacturers of cellular phone equipment, suggested that some of the U.S. industry’s difficulties are caused by quality-control problems.
She concluded, however, that “the U.S. industry has gone the mile in this case. Motorola has stuck it out, lowering prices to maintain market share. It has continued to invest and has rapidly learned from the errors which are to some extent inevitable in any new market.”
Motorola’s price cutting, she said, was “hastened by the dumped imports,” something she said probably had “deprived the domestic industry, particularly Motorola, of returns it could reasonably have expected.” Stern said the duties ordered by the ITC should benefit the entire U.S. cellular phone industry, which currently employs about 1,100 production workers.
The whole industry, she noted, “is changing rapidly and in ways that promise to write a new chapter in the book on how production can be internationalized. . . . But most of the foreign-owned U.S. production is yet to come. Imports have grown rapidly to a point where they have captured three-quarters of the U.S. market this year.”
According to ITC findings, U.S. producers in the first half of 1985 shipped 31,534 transceivers and 29,207 control units, valued at an aggregate $40.2 million. During the same period, 99,406 transceivers and 97,943 control units, at an aggregate value of $88.1 million, were imported from Japan.
