An Interesting Trade TidbitBy
In 2000, Japan had a $42 billion trade surplus in motor vehicles and parts with the U.S. In 2007, Japan’s motor vehicle trade surplus with the U.S. was
a) $18 billion b) $35 billion c) $43 billion d) $55 billion
(answer beneath the fold)
The answer is (d) $55 billion. Despite Honda's and Toyota's assembly plants in the U.S., the U.S. trade deficit with Japan in motor vehicles and parts was $55 billion in 2007.
Here's how the 2007 trade deficit breaks down, by NAICS code. I'm surprised that the motor vehicle trade deficit is so high.
|trade balance, 2007|
|billions of dollars|
|oil and natural gas||-272|
|motor vehicles and parts||-124|
|apparel and textiles||-113|
|misc (including toys and jewelry)||-44|
The oil and gas deficit will fall as prices decline. What other categories of the trade deficit are likely to decline?
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