ought to give policymakers pause when it comes to trumpeting the virtues of a strong dollar.
This isn’t the first time the U.S. has reevaluated its strong-dollar policy. In 1985, faced with mounting trade deficits with Germany and Japan, the U.S. negotiated a managed reduction in the dollar’s value against those countries’ currencies. Following the Plaza Accord, the dollar plunged in value
President Joe Biden recently named economist Brad Setser — who has been a strong critic of countries that keep their currencies low against the dollar — to be the counselor to the U.S. trade representative.
Noah Smith 24 February 2021
The merchandise-trade deficit rose about 3% to $88 billion, while the nation’s surplus in services trade fell to $16.9 billion, the smallest since 2012.
The U.S. goods trade shortfall with China widened in February to a three-month high of $30.3 billion on a seasonally adjusted basis.
Adjusted for inflation, the merchandise-trade gap widened to a record $99.1 billion in February from $96.1 billion.
An agreement reached in February 1987 by the five countries which comprise the G-5 (France, West Germany, Japan, the UK and US) following an earlier decision to correct an overvalued $US. They agreed that the $US had fallen sufficiently and that they would take steps to ensure stability in exchange rates.