I NOTED last week that over half of America’s currenct account deficit can now be attributed to net petroleum imports. And meanwhile, America’s trade balance has continued to improve. Today, Menzie Chinn helpfully provides a chart:
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In December, American exports to China were up just over 60% from the previous December, while imports were just 6% higher. And yet, were you to google “American imbalances”, the results would overwhelmingly focus on China and its currency policy, rather than on America’s reluctance to tax petrol or carbon.