U.S. SENATORS SAY SANCTIONS LIKELY ON MICROCHIPS The United States will likely impose sanctions soon on imports of Japanese microchips, senators said today after a private meeting with Commerce Secretary Malcolm Baldrige. Although the senators said Baldrige told them no decision would be taken until a final determination is made on whether Japanese microchips were dumped in the United States, they said they were virtually sure Japan would face penalties. President Reagan's trade policy advisory group, of which Baldrige is a member, will meet on the issue Wednesday. "I am confident we will see action taken," Sen. John McCain, an Arizona Republican, told reporters. "I am expecting sanctions at least, and even more than sanctions," Sen. Pete Domenici, a New Mexico Republican, said. The senators, several congressmen and U.S. semiconductor industry representatives met with Baldrige and State Department officials to discuss Japan's alleged violations of a September 1986 agreement to stop dumping its microchips in the United States and other countries. They recommended Japanese firms be penalized through tariffs or import duties over the next six to 12 months for continuing to dump microchips. The violations were worth 100 mln dls to the Japanese semiconductor industry, they said. Asked if Baldrige intended to recommend sanctions, Sen. Pete Wilson told reporters, "The clear import of what he said is that there will be." "Japan can't just say they will comply. We think sanctions must be applied," for past violations of the agreement, the California Republican said. The semiconductor industry produces microprocessor chips which are used in high technology products ranging from radios to defence missile guidance systems. Sen. James McClure, an Idaho Republican, said Baldrige told them the administration had not made a final determination that Japanese companies had dumped semiconductor microchips below the cost of production in the United States or other countries. But McClure said senators told him, "There is no doubt dumping is going on," based on evidence such as invoices of purchases of the Japanese products. The two countries signed a pact last September in which Japan agreed to stop selling its microchips in the United States and other countries below production costs and to allow the U.S. semiconductor industry access to the Japanese market. In return, the United States waived its right to impose import duties on the Japanese microchips. Japanese officials have said they have lived up to the pact and have asked Japanese chip-makers to further slash output to save the pact. Japan has frequently been the target of congressional discouragement over last year's record 169-billion-dlr trade deficit. Tokyo had a 59-billion-dlr surplus with the United States last year and had large surpluses with other countries. The Senate yesterday unanimously passed a resolution calling for action against Japan for violations of the pact since September. The resolution will be introduced in the House next week by Rep. Bob Matsui, a California Democrat.