Import Inflation

Foreign products are going up

When the sharp decline of the dollar began eight months ago, most Americans figured that the only major victims would be tourists: they would need more dollars to buy foreign trinkets. Now the greenback's sickness is infecting all Americans. Foreign sellers are increasing their prices to Compensate for the dollar's fall, and some U.S. manufacturers of competitive products have felt freer to follow through with price rises of their own.

Toyota, Datsun and Volkswagen all raised prices last month by 3.9% to 5.4%; about the same time, Ford Motor Co. lifted prices on three of its smaller models.

Indeed, major foreign carmakers have raised prices five or six times during the past year, making it easier for Detroit to post increases.

Rises on other imports are adding to the pressure: a Pentax camera that cost $285 late last year will soon be up to $330; in two months a Swiss Omega watch has jumped $100, to $495. Wholesale jewelry prices, pushed up by rising gold prices as the dollar has waned, were up 30% last month. In the Washington, D.C., area, half a gallon of Johnnie Walker Red Label Scotch is up $1, as is a fifth of Courvoisier cognac; wine importers have said that price increases are coming.

"Sympathetic" price rises by U.S. makers of similar products are likely to follow, digging deeper still into the pocket of the U.S. consumer. The Treasury estimates that the decline in the dollar will increase the inflation rate by one-half point this year--and that adds up to billions in added costs for cars, cameras, cheese and other imports.

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