Trade: Can the U.S. Still Compete?

In one industry after another, U.S. manufacturers are finding their markets at home and abroad besieged by aggressive foreign firms. Some 10% of the autos, 12% of the steel, and 31% of the shoes now reaching U.S. consumers are imported. "We simply can't compete on price," says Chairman Russell De Young of Goodyear Tire & Rubher Co., explaining bluntly why 300,000 of the 467,000 motorcycle tires sold in the U.S. last year were foreign-made.

Lately the inability to compete has been reflected ominously in the nation's traditional trade surplus—the excess of exports over...

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