are (1) stronger trade laws, (2) American offsets to foreign industrial policies, (3) exchange rate realignment, and (4) the promotion of continued large capital inflows to the United States. The Reagan Administration was a vocal opponent of stronger trade laws. Stronger trade laws are generally perceived within the context of protectionist legislation. The United States would be hurt by a spate of protectionist legislation in many countries, in response to such actions by the United States. Exports account for 8.6 of
7Council of Economic Advisers, Economic Indicators (Washington: United States Government Printing Office, February 1991), 3. the American gross domestic product, while imports account for 11.1 percent. On the surface, it might appear that the US would be a net winner in a trade war. In fact, however, the combination of exports and imports account for 17.7 percent of total economic activity in the United States (where total economic activity is
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