BONN, West Germany -- President Reagan declared a 'national emergency' Wednesday and banned U.S. trade with Nicaragua with hints more sanctions may be added to the administration's campaign against the leftist Sandinista regime.
Reagan, frustrated by Congress in his efforts to win more U.S. aid for the Contra rebels seeking to oust the Sandinistas, announced the trade embargo shortly after arriving in the West German capital for the seven-nation economic summit of major industrial democracies.
The total ban on trade, on Nicaraguan airline flights and ships arriving in U.S. ports puts Nicaragua in the same category, as far as U.S. trade is concerned, as Iran, Vietnam and Libya.
Last year, Nicaragua sold $57 million worth of bananas, beef, shellfish and coffee to the United States, while buying $111 million in American goods, mainly agricultural chemicals, fats and oils, and some machinery, including tractors.
The embargo, effective May 7, was imposed by executive order and does not require congressional approval. In the order, Reagan said, 'The policies and actions of the government of Nicaragua constitute an unusual and extraordinary threat to the national security and foreign policy of the United States and (I) hereby declare a national emergency to deal with that threat.'
The action, White House aides said, was taken in response to the vote in the House last week to deny Reagan $14 million in aid for the Contras.
A statement from the White House said, 'These measures should be seen by the government of Nicaragua, and by those who abet it, as unmistakable evidence that we take seriously the obligation to protect our security interests and those of our friends.'
Presidential spokesman Larry Speakes raised the prospect of further U.S. actions to pressure Nicaragua, which Reagan portrays as a Soviet-sponsored staging-ground for communist insurrgency in the Americas.
'A number of options remain,' Speakes said. 'We hope it will be seen that we are serious and they'll mend their ways.'
Speakes said the economic option was chosen because the Nicaragua's economy is already unstable and the trade ban would not have a susbtantial impact on the U.S. economy.
Justifying the action, the administration cited actions it said showed a 'disturbing trend,' including:
-New ties between Nicaragua and the Soviet Union announced in Moscow during the visit by Nicaraguan President Daniel Ortega, resulting in assurances of new economic assistance.
-Delivery to Nicaragua last week by the Soviet Union of military helicopters and by East Germany of 'a large shipment of military transport equipment.'
-The recent capture in Honduras of seven Nicaraguans, identified as agents of the Nicaraguan state security service sent to assist Honduran rebels.
Reacting to the move, the Soviet news agency Tass called the trade ban the latest stage in an undeclared U.S. war against Nicaragua. In Managua, Sandinista leader Col. Bayardo Arce was quoted as saying, 'There will be no going back. We must continue to defeat such aggressions, threats and blackmail.'
In Managua, a government official said the embargo will not force Nicaragua to its 'knees in hunger' and he urged Nicaraguans to make sacrifices to blunt the U.S. action.
'They have not been able to destroy us,' said Comandante Bayardo Arce, political director of the ruling Sandinista party. 'They will not succeed in forcing us to our knees in hunger.'
Nicaraguan President Daniel Ortega, meeting with Yugoslav leaders Wednesday, reiterated the Sandinista government's determination to safeguard its independence, non-aligned policy and the right to develop its own internal system of 'political pluralism.'
Reaction in the Congress, where Reagan's Central American policy has been hotly contested, was mixed.
'I think it's time to get tough with Ortega. Get tough and stay tough,' Senate Republican leader Robert Dole of Kansas said, adding he thinks the move would strengthen Reagan's hand in trying to win aid for the Contras.
But Rep. Edward Markey, D-Mass., said Reagan 'seems to be retaliating against Congress as much as he is pressuring Nicaragua.' The trade ban, he said, 'seems designed to push Nicaragua irreversibly into the arms of the Soviets.'
Backing Reagan, Sen. Richard Lugar, R-Ind., chairman the Senate Foreign Relations Committee, said, 'It's important to say we're not going to have business as usual. That was one of the criticisms last week (during debate on Contra aid), that even while talking about serious measures of a military character, we continuing trade in bananas and coffee and what have you. Now that's going to stop.'
Nicaragua is behind in debt payments to most of its creditors, including $15 million owed to the World Bank. As a result, the World Bank has stopped making new loans to the Sandinista and suspended further payments of existing loans.
The United States already has stopped buying Nicaraguan sugar and stopped all aid to the country in 1981.