The increasingly shrill dialogue between the United States and China over economic issues should sound familiar to many Japanese. A swelling U.S. trade deficit with China has led to demands by Washington for the revaluation of the Chinese currency, threats of trade sanctions from Congress, and angry retorts about U.S. unilateralism from Beijing.

High-level economic talks — the Strategic Economic Dialogue (SED) — held last week revealed growing frustration on both sides. The truth now, as it was a little more than a decade ago, is that both economies have structural problems and fixing them will take time. The key is to avoid mistakes that could have destabilizing consequences for the world.

According to the U.S. government, two-way trade between the two countries reached $343 billion in 2006. The U.S. also marked up a historic $233 billion deficit with China at the same time, prompting U.S. demands that Beijing revalue its currency to trim its surplus. China tried to head off growing anger in Washington — and the calls for protectionist measures to forcibly rebalance the ledger — in July 2005 by ending its currency's fixed exchange rate against the dollar. China revalued the currency by 2.1 percent and let it float within a limited band against the dollar and other currencies. To the consternation of U.S. officials — but not most economists — the yuan appreciated a mere 6 percent and has had no appreciable effect on the trade balance. Japanese should be feeling a sense of deja vu.