Word: tradings
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Dates: during 1980-1989
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Many economists think that the sharp decline of the dollar over the past 2 1/2 years will eventually reduce the trade deficit substantially by making imports more expensive and U.S. goods cheaper for foreign consumers. So far, though, the impact of the dollar's drop has been disappointing. One reason is that many foreign manufacturers have accepted lower profit margins rather than let their prices rise in proportion to the dollar's fall. Moreover, while the dollar has gone down by more than 40% against the Japanese yen and the West German mark, it has fallen much less against...
...heavily in expansion, but much of the equipment they need comes from foreign suppliers. In fact, the U.S. now gets about 50% of its machine tools from abroad. Importing such capital goods will help build up America's industrial base, but in the short run, it will exacerbate the trade deficit...
While agreeing that a better balance between consumer demand and supply in the U.S. economy is crucial, many trade experts, along with nearly all politicians, think the Government should take specific actions to reduce imports and boost exports. Clyde Prestowitz, a former trade negotiator for the Reagan Administration, suggests that the U.S. can do a better job of stimulating American sales in foreign markets. It is fine, for example, that the U.S. is now pressuring Japan to accept more beef and citrus products. But the Government could focus more attention on ensuring fair trade in high-tech industries that have...
...course, neither trade negotiations nor the declining dollar will do much to reduce imports and raise exports unless U.S. companies are willing to go after foreign competitors aggressively. Too many firms have used the weak dollar to lift prices and fatten profits rather than increase market share. During 1986 and 1987 many California wineries raised their prices by as much as 40% as imports from Europe became more expensive...
That strategy by GM -- America's leading industrial company -- will bolster its profitability but do nothing to help the U.S. close the trade deficit. Nor will any trade bill Congress devises have much chance of success if U.S. companies lose their resolve to outhustle and outsell foreign competitors...