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Opinion: Will U.S. Face Trade Friction With China Like That With Japan in 1970s?

By Shen Jianguang

On a recent visit to Japan, I was told by a Tokyo-based investor that they were worried China might soon repeat a regrettable chapter in Japan’s trade history.

Between the 1970s and the 1990s, the United States had a major trade deficit with Japan, and trade between the two countries was marred by continuous friction. In 1985, pressure from the U.S. led Japan to sign the Plaza Accord, which resulted in significant appreciation of the yen and paved the way for Japan’s subsequent economic bubble. Today, the United States’ greatest trade deficit is with China — could China be heading in the same direction?

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