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August 12, 1987

IBM “CAUGHT BY PUNITIVE IMPOST ON 16-BIT JAPANESE CPUs”

By CBR Staff Writer

Interpreting to the letter the terms of President Reagan’s punitive tariff on $300m of Japanese imports, imposed in April as a sanction against perceived non-compliance with the US-Japan chip accord, the US Customs Department is classifying imported processor boards as 16-bit personal computers, and the move has reportedly hit IBM’s Personal System/2 Model 30. Matsushita is believed to be stuffing Model 30 boards for IBM in Japan; IBM will only confirm that Model 30 boards are manufactured by itself and by an outside vendor, but it is likely that the latter is Matsushita, which manufactures many of IBM’s personal computers for the Japanese market. The Customs Department points out that single-board computers were specifically included to block the loophole that Japanese firms might otherwise bring in machines in knockdown form and do final assembly in the US. The classification is being bitterly opposed by the Computer & Business Equip ment Manufacturers’ Association, because it also means that single-board computers imported by US manufacturers from offshore bases such as Singapore, if classified as computers, carry a 4% to 5% import duty. In the past they have got in duty free as computer parts. The Association argues that even a 4% to 5% tariff is enough to drive some marginal US firms to the wall.

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