Current Issues in Economics and Finance

The Growing U.S. Trade Imbalance with China

May 1997Volume 3, Number 7
JEL classification: F13, F14, F32

Authors: Thomas Klitgaard and Karen Schiele

Over the past decade, the United States has gone from enjoying a small trade surplus with China to grappling with an enormous deficit. Just to keep the gap from expanding in 1997, U.S. exports to China would need to grow at an extraordinary rate—four times as fast as Chinese exports to the United States. Despite recent gains and China's efforts at trade liberalization, growth on that order appears unlikely, and the deficit can be expected to widen in the near term.

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