Future Buying Prospects in Global Trade

Abstract

An analysis of the U.S. international merchandise trade deficit shows recent improvement. From a high of almost $200 billion a few years ago, the deficit dropped to about $100 billion for 1990. While the trade deficit still needs to be reduced, perhaps the major threat to world trade growth is reactive political moves to cut the deficit too quickly. Consider that, in December of 1990, the monthly deficit dropped by almost 30 percent. As of February 1991, that month’s deficit was $5.33 billion. So, the deficit is running at a rate of less than $65 billion for this year.