Aside from hurting U.S. automakers, how does the yen subsidy impact the American economy?
The artificially low yen has helped fuel our trade deficit with Japan. The U.S. trade deficit with Japan has been our largest or second largest bilateral trade deficit for over 25 years. In 2006, the U.S. trade deficit with Japan reached $88 billion, the second largest such deficit we maintain with any trading partner. A full two thirds of this deficit ($54 billion) comes from autos and auto parts.
