Number: RS20400
Title: THE RISING U.S. TRADE DEFICIT WITH JAPAN: OVERVIEW AND POLICY OPTIONS
Authors: Dick K. Nanto, Foreign Affairs, Defense, and Trade Division 
Abstract: The U.S. merchandise trade deficit with Japan is expected to reach about $66 billion in 1999. It is the largest bilateral deficit with any U.S. trading partner. In addition to the growing deficit in goods trade, the bilateral deficit in investment income also has become unusually large-so large that it outweighs the U.S. surplus in services trade with Japan. As a result, the bilateral current account deficit now exceeds the merchandise trade deficit with Japan. Options for dealing with this deficit include letting market forces cope with it, raising the value of the yen, opening export markets in Japan, increasing U.S. investments in Japan, and reducing U.S. imports from Japan.
Pages: 6
Date: Updated March 1, 2000