While the widening gap needs to be watched, say economists, there's no real evidence that the trade deficit is hurting the U.S. economy. On the other hand, any rushed attempt at a cure could have dire consequences. "When the Asian economies begin to recover in earnest and their domestic consumption goes up, that will be the time for them to open trade barriers and get U.S. exports up to even the balance," says TIME senior economics reporter Bernard Baumohl. "But the danger is that U.S. manufacturers start lobbying their congressmen for tariffs, and congressmen start listening." Trade barriers start to go up at the U.S. border, other countries respond in kind, and pretty soon the global trade flow that has made the U.S. economy the juggernaut it is today is choked off.
Spend-Spend U.S. Sees Trade Deficit Soar
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How high is too high? The U.S. trade deficit soared to a third straight record in March, reaching $19.7 billion. A small sign of hope -- U.S. exports climbed by 0.9 percent -- was trampled by flush Americans' enthusiasm for attractively priced goods from countries with crisis-ridden economies such as Japan and Korea.