The US has had a trade deficit since 1975, so is the US trade deficit really such a bad thing?
In: 436
So if you go back to the days of mercantilism, then yes it would be bad.
However we’ve moved past those days. The economy today is much more complex than exports must exceed imports.
At the end of the day, yes, more dollars are flowing out of the country than euros or yen is coming in. But if what we’re getting for those dollars is more valuable than the money then ultimately it’s still a benefit to us.
Computer processors are a great example. We don’t produce any here. Maybe in an R&D capacity. But certainly not on an industrial level. It all happens abroad. Mostly in Taiwan (which is a huge issue as tensions with China increase, as a war in Taiwan would mean no new computers in America). We import way more from Taiwan than we export there. But could you imagine not having computers? The access to computers makes every other industry so much more efficient. Meaning we are able to offset that loss in trade to our own internal increased productivity.
Ultimately money is just a measure of value. But if you’re able to trade money to increase your country’s value, you’re effectively making more money.
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