An Interesting Trade Tidbit

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
electronics -123
apparel and textiles -113
petroleum products -46
misc (including toys and jewelry) -44
metal refining -41
pharmaceuticals -35

The oil and gas deficit will fall as prices decline. What other categories of the trade deficit are likely to decline?