The Trade Deficit and the Value of the Dollar

This article reviews the factors underlying our current trade difficulties and assesses the outlook for the trade deficit. A decline in the exchange value of the dollar would significantly improve the trade deficit. Such a decline is essential to any substantial improvement, but the improvement would be slow in coming. Many of the problems facing U.S. industry predate the recent rapid rise in the dollar and would not be eliminated by a comparable fall. The "high-tech" industries would probably gain the most, but some declining industries with long term problems might not gain at all.