Misunderstanding the predominant forces that determine the balance of payments (BOP) has resulted in the recommendation that restrictive trade policies be used to solve the current U.S. BOP "problems." This paper reviews the BOP relationships, accounting concept, theory, and history (1975-86). It shows how various account balances respond simultaneously to international macroeconomic developments and that movements in agricultural trade have mirrored the movements in nonagricultural trade. Imbalances are caused by the same forces and should not be viewed as problems in and of themselves. Therefore, macroeconomic, not commodity-specific, policies are more likely to alleviate imbalances.