3 ms·

Trade deficit is a good thing. It means foreigners are keeping capital in the US as investment on their trades rather than exporting it out to balance it out.

lokar 9mo ago
while that is true, there is more to it than that. It distorts US finances and debt market. It is helpful to the US, until at some point it will cause major problems, it's just hard to say exactly when.
scottiebarnes 9mo ago
Generally I'd rather be in a trade surplus; I would want my country to sell more things than it buys. Energy, technology, machinery, services, whatever it is, if I'm selling, it means I have productive capability/advantage over others and thus more independence.
- direwolf20 9mo ago
  If you have a deficit, you have free stuff. If you have a surplus, you have the ability to produce stuff, but you're throwing away the stuff you produce. The ideal value is probably zero — perfect balance, as all things should be.
davey48016 9mo ago
My understanding is that while politicians generally focus on trade deficits being the result of unfair trade practices or high US labor costs, the majority of economists think that foreigners preference to invest in US financial markets is the main driver.
cyrialize 9mo ago
Another way to frame trade deficit (sometimes) is using the phrase "investment surplus". Many top economies have trade deficits. China is a unique example that goes against that, although I believe China is trying to have their population spend more rather than save.
mrexcess 9mo ago
"Actually, it's good when a country imports more than it exports." This claim seems like it warrants at least some qualifying statements. Certainly you'd acknowledge where there are situations in which a trade imbalance is a net negative?
direwolf20 9mo ago
It means the US received a lot of goods and services without any need to actually make them or make something of equal value.

lokar 9mo ago

while that is true, there is more to it than that. It distorts US finances and debt market. It is helpful to the US, until at some point it will cause major problems, it's just hard to say exactly when.

scottiebarnes 9mo ago

Generally I'd rather be in a trade surplus; I would want my country to sell more things than it buys. Energy, technology, machinery, services, whatever it is, if I'm selling, it means I have productive capability/advantage over others and thus more independence.

direwolf20 9mo ago
If you have a deficit, you have free stuff. If you have a surplus, you have the ability to produce stuff, but you're throwing away the stuff you produce. The ideal value is probably zero — perfect balance, as all things should be.

davey48016 9mo ago

My understanding is that while politicians generally focus on trade deficits being the result of unfair trade practices or high US labor costs, the majority of economists think that foreigners preference to invest in US financial markets is the main driver.

cyrialize 9mo ago

Another way to frame trade deficit (sometimes) is using the phrase "investment surplus". Many top economies have trade deficits. China is a unique example that goes against that, although I believe China is trying to have their population spend more rather than save.

mrexcess 9mo ago

"Actually, it's good when a country imports more than it exports." This claim seems like it warrants at least some qualifying statements. Certainly you'd acknowledge where there are situations in which a trade imbalance is a net negative?

direwolf20 9mo ago

It means the US received a lot of goods and services without any need to actually make them or make something of equal value.