U.S. Strategic Trade Policy Zhang Jianxin (64) Since the 1970s, owing to the annual trade deficit and budget deficit, with the transition to the postindustrialized society, and under strong pressures from industrial groups, the ideas of U.S. trade policy has undergone great changes. The trade policy has transformed from advocating traditional free trade or protectionism to fair trade and strategic trade policy. The changes in policy thinking were supported by the emerging new theory of international trade in the 1980s. The Japan U.S. semiconduct disputes and EuropeU.S. commercial aircraft disputes demonstrated that government intervention could change the end result of a strategic game on a market of incomplete competition. The strategic trade policy not only helps domestic manufacturers to transfer profits but also helps them to create an "external economy," therefore adding benefits to the national economy. In the 1990s, the Clinton Administration took strategic trade theory as its mainstream economics of foreign trade policy, and carried out "export dynamic" strategy. Although the U.S. government failed to eliminate the trade deficit, Americas export capabilities have increased by a big margin. The strategic trade policy has greatly contributed to the restoration of Americas international economic competitiveness.