The U.S. trade deficit: made in China?

Rapid growth of the U.S. bilateral trade deficit with China has promoted a widespread view that the overall trade deficit is "made in China." The authors examine the probable consequences of increased protection directed toward U.S. imports from China. Their appraisal of recent and prospective U.S. trade policy focuses on textiles and apparel—sectors where the growth of imports from China has been prominent. They also consider the likely effects of yuan appreciation on the bilateral and overall trade deficits.