An Analysis of the Global Position of U.S. Manufacturing *

Since 1975, the United States has been importing more than exporting, therefore running a continuous current account deficit. Exhibit 1 shows the U.S. current account balance over the past 32 years. Although there have always been ups and downs, since the early 1990s, the growth of the deficit has been rapid and major. On a global level, U.S. imports are necessarily some other country’s exports. The U.S. current account deficit is matched by bilateral current account surpluses of other nations. At $103 billion, China had the largest current account surplus with the United States in 2002, followed by Japan with $70 billion, Canada with $50 billion, and Germany with $36 billion.