Technology: Keep the Fox From the Coop

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Every year hundreds of foreign firms offer to buy stakes in U.S. companies, and the Government barely notices. But the proposal by Fujitsu, the Japanese conglomerate, to acquire an 80% interest in Fairchild Semiconductor has begun ringing alarm bells in Washington. Commerce Secretary Malcolm Baldrige and Defense Secretary Caspar Weinberger have asked the White House to consider blocking the purchase. Since Fairchild supplies computer chips to the U.S. military, the Cabinet officials fear that the deal could threaten national security. Baldrige is also concerned that through Fairchild, Fujitsu would gain a distribution system for its supercomputers, powerful machines that can be used to design weapons systems. At the same time, Japanese government institutions have refused to purchase U.S. supercomputers.

Congress is increasingly critical of the Japanese trade posture as well. Last week the Senate Finance Committee passed a resolution calling on the President to retaliate against Japan for its alleged failure to live up to the July 1986 semiconductor trade pact. Under that agreement, Japan promised to refrain from selling its chips in the U.S. at prices that are below cost. Concludes Baldrige: "The level of anti-Japanese trade feeling is higher than ever before."