Why They Can’t All Be Trade Surpluses

As the potential for a trade war with China escalates, and the rhetoric about NAFTA continues to heat up, we thought we’d step back and talk a bit about the perception underlying current political concern regarding trade: trade deficits. President Trump’s comments early in March stated that the U.S. has a deficit with almost every county–something that just isn’t true. But this perception that trade deficits mean that, according to President Trump, “we lost, over the last number of years, $800 billion a year,” raises questions about what a trade deficit is and how it’s measured.

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