Changing U.S. trade patterns
The last year in which the U.S. merchandise trade balance
recorded a back-to-back
annual surplus was twenty
years ago, in 1970. That
surplus was $2.6 billion on the balance-of-payments
basis. In 1987, the merchandise
trade deficit bottomed out at $160 billion. By
1989, the deficit had been reduced to around
$110 billion (see Figure I). Much has been
made of the persistent U.S. trade deficit, why
it became so large, why it has improved in
recent years, and why, finally, it has not improved
more.
