The Council on Foreign Relations recently posted an interesting graphic on the U.S. trade balance in the wake of the financial crisis (see It’s Almost All Good).

The basic idea: Since the financial crisis, the U.S. trade balance has improved with just about every country but China.

That the trade balance has improved vis-a-vis most trading partners is not surprising given the 15% (or so) drop in the value of the U.S. dollar since 2006. That it has worsened vis-a-vis China in spite of that stylized fact virtually assures that it will continue a hot-button issue among U.S. policymakers, and further threaten to escalate bilateral trade tensions (see also So Much for the Flexible Yuan and China Not a Currency Manipulator?).

As I mentioned last summer:

…don’t be surprised if the trade deficit and cries of unfair trade practices begin to occupy a more prominent place in political discourse.

We certainly live in interesting times…

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This entry was posted on Thursday, February 3rd, 2011 at 5:15 pm and is filed under International Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.