[Soriak]

The largest US export good is parts for nuclear reactors - over $185bn a year. There's a few countries that want to go back to nuclear power and they'll have a couple suppliers to choose from, a low dollar can be an advantage - although low cost isn't the primary objective with those constructions. It's followed by electronics, where a boost in exports should be noticeable.

More directly, US retailers at the Canadian border already see increased sales, which is met by equal displeasure on the Canadian side. As will anyone shipping to Canada - even with import fees it's becoming cheaper than purchasing it there. EU countries also import mostly from the US and will likely do so even more, especially with the very high Euro. This is already paying off for cheap items like books and will only do so even more with electronics. (2nd largest US export product) Now if more stores would adapt and ship globally... since HDTVs now use the same format, the whole PAL/NTSC problem is resolved.

Remember that even stuff manufactured in China is largely just outsourced by US companies, so the biggest share of the revenue still stays in the country. If it leads to more sales/lower cost, the company may hire more people for the design or advertisement teams. Essentially you're trading low-paid work for jobs with higher salaries. Outsourcing definitely makes economic sense for everyone, opposition comes from politicians who want to look like they're helping the little guy. Over the long term, he's better off with the job abroad and government funded training programs can mitigate the social cost if necessary.

The international currency exchange is all about supply and demand of a currency. As more people want to buy items in US Dollars, the demand for the dollar will go up and with that its price. Fewer Americans will travel abroad, or import things, which means less demand for other currencies and those prices go down. This is of course a little more complicated, as central banks mess around with it as well. For example the European central bank can (and probably will do so more) buy US Dollars with Euros, driving down the price of the Euro and bringing the dollar back up.

The EU central bank could also buy dollars with Yen, for example. That'd then piss of Japan as the Yen moves away from where they want it to be, forcing them to either buy it to drive up the value, or sell it if they want it lower. (the fed can buy dollars with Yen, too, which would lead to heads exploding everywhere) All this somehow hurts and benefits each country at the same time, depending on whom you ask. In reality it's business as usual. (and, just as an side, a reason to keep the fed around - no central bank means the US can't affect the dollar on the global market, but every other country will be able to mess with it at will)

As for the US... at some point gas may just get unbearably expensive, but the market will adjust for that as well - people will drive less, more fuel efficient cars become attractive... heck, the Smart Car is coming to the US:



Before rising gas prices, this wouldn't have sold well.

Another consequence of higher gas prices is that telecommuting becomes more attractive - not just in the US but everywhere. Something that'll also be great to export.

Assuming a democratic president who can get CO2 taxes passed, you can bet on more successful alternative energy companies popping up across the US. They'll also export globally as demand goes up, which beats importing it from European companies the way it's looking now.

I think it's much more important to look ahead, recognize trends and do everything to nudge the domestic industry there without doing too much harm. For example a CO2 tax that will start low and increase every year up to its final rate. Gives people and businesses time to plan ahead and forces change now, instead of adding it all at once and constantly delaying the date. (like what's happening with analog TV)

If this can be done well, the trade deficit may just fix itself. If not, it's just going to grow much faster regardless of what happens now.