The Dollar Can Only Do So Much
The trade deficit became large as the value of the U.S. goods expensive. U.S. imports rose dramatically and export growth stalled. The U.S. merchandise trade deficit went from $25.5 billion in 1980 to $159.5 billion in 1987. The U.S. has gone from the world's largest creditor nation to the world's largest debtor, with nearly $600 billion of foreign debt.