ABSTRACT
This chapter reviews economic changes that led to the climax in 1971-1972 before a truce was reached, probe their causes, and offers a conjecture on the future course of trade relations between the United States (US) and Japan. Bilateral trade between the United States and Japan changed in the same way, and is very much different from the trade pattern usually observed among industrial countries, which trade industrial goods among themselves. Japan's trade pattern has been to import raw materials and export finished goods; 70 percent of Japan's imports have consisted of food, crude materials, and fuels. This ratio tended to decline somewhat in the sixties, but the decline was mostly accounted for by an increase in imports of processed materials. Japanese agricultural policy, whichever way it may turn, will have a direct bearing on US-Japan trade. The trade gap can be filled in if the United States increases its exports of industrial goods, particularly consumer goods.
