Chapter 6: Science & Engineering 93
U.S. Trade Balance
During the 1980s and into the early 1990s, the United States ran consistent trade deficits, importing more manufactured products than it was able to export. A strong U.S. dollar during the early
eighties led to a rise in imported merchandise while exports remained stagnant. As the dollar weakened during the late 1980s, U.S. exports surged, growing at an average rate of nearly 14 percent per year during the 1985-89 period. U.S. demand for
imports slowed somewhat during this period, allowing for a narrowing of the U.S. trade deficit. The U.S. merchandise trade deficit continued to narrow as the 1990s began, dropping to a 7-year low in 1991.
Only one additional year of data was available, but it indicates a worsening of the deficit. (See figure 6-9 and appendix table 6-4.)
U.S. high-tech exports have traditionally overshadowed U.S. imports of high-tech products. Nevertheless, trade surpluses began to narrow during the 1980s and finally, in 1984, U.S. imports of foreign
high-tech products exceeded U.S. high-tech exports.(click here for footnote 10) The U.S. trade position in high-tech products improved in 1987 and 1988, but deteriorated quickly as the nineties began.
U.S. trade in nonhigh-tech products produced consistent trade deficits throughout the 12-year period examined (1981-92). As seen for U.S. trade in high-tech products, U.S. trade in all other products worsened (larger trade deficits) through the early
and mid-1980s; it then improved (narrower deficits) in the latter part of the decade. Unlike trade in high-tech products, U.S. trade in other manufactures continued to produce narrower deficits in 1990 and 1991. By 1992, U.S. trade in nonhigh-tech
products also began to produce a larger trade deficit.
Footnote 10:
Trade data (exports and imports) are available on a product-level basis; production data are not. To conform with the production and trade data used elsewhere in this chapter, the discussions of trade balances are based on industry-level data. The
industry-level OECD definition of high-technology trade used here shows more midterm fluctuations and an earlier trade deficit for U.S. high-tech trade than trends portrayed using certain product-level definitions. See DOC
(1983) and Abbott (1991) for technical discussions of alternative high-tech definitions.
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