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January 6, 1988


By CBR Staff Writer

The trade deficit between the US and the rest of the world in electronic goods widened by 8.8% to $3,700m in the third quarter of 1987, the American Electronics Association reports from Santa Clara, California, reversing the trend for the first half of the year, when there was a narrowing of 13% in the trade gap. With Japan, the US deficit widened by 4% to $5,000m in the third quarter, reducing the narrowing for the nine months to 2.7%. Commenting on the figures, which make it clear that affairs were beginning to deteriorate sharply well before Black Monday, October 19, Association senior vice-president Ralph Thomson, declared The third-quarter increases in both negative trade balances is a cause for concern and an obvious indicator that it will take more than a decline in the value of the dollar to solve our trade problems. Clearly, in the next year, we must convince Congress and the administration and all presidential candidates that for the long-term health of the country and our industry, the federal budget deficit must be reduced significantly. Even in the stronghold of computers, the industry saw its positive balance shrink slightly to $2,000m in the first nine months of 1987 from $2,100m in the same period of 1986. The trade deficit in the communications segment swelled by 39% in 1987 to $1,800m, while the computer trade deficit with Japan grew 29% to $4,000m.

US Electronics Industry Trade Balance

1986 1987 First nine months First nine months

US versus rest of world Computers $2,100m $2,000m Consumer ($8,200m) ($7,500m) Components ($3,100m) ($3,000m) Communications ($1,300m) ($1,800m) Instruments $1,300m $1,500m Other ($400m) ($200m) Totals ($9,600m) ($9,000m)

US versus Japan Computers ($3,100m) ($4,000m) Consumer ($6,400m) ($4,700m) Components ($2,500m) ($2,800m) Communications ($1,900m) ($2,100m) Instruments ($400m) ($400m) Other ($700m) ($600m) Totals ($15,000m) ($14,600m)

Figures are rounded to the nearest $100m; ( ) means deficit; the figures are compiled by the Association using data supplied by the

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