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BRIEFLY

No end to the U.S. trade deficit with Japan is seen.

October 30, 1985

Even if Japan were to remove all trade barriers, its $50-billion trading surplus with the United States would be pared by only $5 billion to $8 billion, private analysts said. The study by C. Fred Bergsten and William R. Cline of the Institute for International Economics concluded that the U.S. trade deficit with Japan will never sink below $20 billion to $25 billion a year, regardless of whatever steps either government takes to correct the imbalance. Bergsten and Cline said the exchange rate gap between the two currencies is the major culprit behind the U.S. trade deficit, which totaled $91.1 billion last year.

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