The U.S. merchandise trade deficit is setting new records almost monthly. Every new story on the topic contains dueling perspectives from economists who argue that the trade deficit is a good sign for the U.S. economy and those that see it as a threat to American prosperity. Under present circumstances, however, the trade deficit unquestionably raises issues worthy of some concern.

The immediate cause of the skyrocketing deficit is clear. The combination of the longest U.S. economic expansion in history and the economic fallout of the Asian crisis has driven up the U.S. trade deficit.

The Asian economic crisis and other foreign economic problems have left much of the world eager to export as much as possible. At the same time, only the U.S. economy has continued to grow strongly and remain open to imports. Unfortunately, these same foreign economic problems have soured potential markets for U.S. exports.

That explanation is somewhat reassuring, but it is only part of the story. There are several good reasons for concern over the trade deficit.

First, there is strong evidence that a portion of the U.S. trade deficit is not merely the result of macroeconomic trends, but of structural problems in foreign markets. This is particularly true of the leading sources of the U.S. trade deficit, Japan and China.

Japan still imports less than would be expected for an economy of its size. In many sectors, from steel to automobiles to flat glass, a series of structural barriers keep imports at very low levels.

China is not a carbon copy of Japan, but there are some similar problems. China's exports to the United States have enjoyed almost exponential growth in recent years, but U.S. exports to China have only grown anemically.

This is particularly surprising since China's economy has been growing strongly and has had great demand for the capital-intensive goods that the United States excels in producing. Under these conditions, one would expect the United States to have a strong trade performance in regard to China. Instead, the United States imports five times as much from China as China does from it.

The United States is well justified in seeking an end to the Chinese trade and industrial policies that interfere with U.S. exports.

A second issue of concern to be considered in connection to the trade deficit is its impact on U.S. savings and manufacturing industries.

Many, notably organized labor, have argued for years that the trade deficit was eroding the U.S. industrial base and destroying high-paying jobs. A number of economists countered that the trade deficit was simply the result of the failure of the U.S. economy to save enough; the U.S. budget deficit was frequently cited as a key cause.

Now, however, that argument seems badly in need of update. The U.S. budget deficit has been replaced with a surplus, but the trade deficit soars ever higher.

True, U.S. savings are still low, and no one can deny the relationship between apparent excess consumption and the trade deficit. The seeming unwillingness of Americans to save does likely contribute to the trade deficit, but this relationship is complex and works in both directions.

For example, if factories close because of imports and workers are laid off, it means that those workers are unlikely to save or pay taxes. At the same time, government support payments in the form of unemployment insurance will rise. Thus, an increase in the trade deficit can contribute to lower U.S. savings as well as vice versa.

The final reason for concern over the trade deficit has attracted considerable attention lately. It is that the uncontrolled trade deficit will lead to a decline in the value of the dollar. This, in turn, will drive up inflation, make it difficult to borrow from abroad, and push the U.S. economy into a deep slump or even a depression.

Some have argued that the recent decline in the dollar against the yen is the first sign of this adjustment. It is too early to make Chicken-Little- like predictions of an economic catastrophe. But it is important to keep in mind that there is a price to pay for a trade deficit and that the current imbalance is not sustainable.

The trade deficit is neither a simple sign of strength nor an unambiguous sign that disaster is near. It does, however, raise serious issues that are worthy of consideration.

The current trade and current account deficits are unsustainable. It may be that the concern over the record deficits is partly misinformed, but if it brings constructive attention to this long-ignored problem it may still prove quite positive.