Business Notes Trade

Perhaps the only thing that grew faster than the $150 billion trade deficit this fall was protectionist sentiment on Capitol Hill. Last week the House of Representatives vented its anger and approved a Senate-passed bill that would reduce imports of textiles from Korea, Hong Kong and Taiwan by up to 30%. Imports of shoes would also be allowed only 60% of the U.S. market, and the President would be directed to negotiate voluntary restraints with foreign copper producers. The bill, however, is expected to be vetoed this week by President Reagan. While the bill passed easily, neither house of Congress mustered the two-thirds majority needed to override a veto.

Textile lobbyists from Southern states initially had broad backing. But support waned this fall, when the Administration took a tough stance on free trade and also succeeded in driving down the dollar with the help of other industrial powers. House opponents of the bill argued that the legislation would invite retaliation from countries that import U.S. goods. Nonetheless, the bill's backers feel that Congress, by passing the legislation, has sent a powerful message to foreign nations that they must trade fairly or face U.S. sanctions.