Interesting piece in the New York Times on the dollar and the trade deficit.

But another reason is the worldwide decline during the 1990’s of what
economists call "pass-through rates": that is, the extent to which
changes in the exchange rate induce changes in a country’s import and
export prices. A study by the economists Linda Goldberg and José Manuel
Campa found that pass-through rates for the United States were
significantly less than for other industrial countries. A 10 percent
change in the dollar has generally yielded only a 2.5 percent change in
American import prices within one quarter, and only a 4 percent price
change after several quarters. Another study by the Federal Reserve
found that pass-through was nearly zero. Indeed, in the case of the
Japanese yen, even a 25 percent rise in the yen to dollar rate has
generated little if any increase in the price we pay for Japanese goods.

I’ve looked at this before, the puzzle that as a currency declines, we actually expect to see a trade deficit widen, at least in the short term, due to something called J Curves. As Owen said in the comments:

You are also right that the impact on the deficit of a change in the
dollar depends on the sizes of the import and export elasticities.

Now here we have academic research that US elasticities are rather different from those of other countries, and that therefore the dollar will have to fall further to correct the trade imbalances. From my point of view, one of those, "ah, that’s interesting," things. Well, it would be if I wasn’t paid in dollars but live in euros, anyway.