The US has had a trade deficit since 1975, so is the US trade deficit really such a bad thing?
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A trade deficit reduces the value of a currency over time.
But the US is in a really weird place due to the dollar being the currency used for trading oil. Which props up the value a currency the US can freely print. Meaning the US can afford larger trade deficits than other nations could even dream of.
I’ve seen many estimates that the US has no trouble what so ever dealing with the trade deficit and could go on like that forever.
And it’s not really good or bad, it’s more good and bad. Having a trade deficit means the US is getting a lot of stuff while paying less than it should. But it also means job losses in the US which increases inequality and political instability. It also means that some technologies will see their next generation being developed in other nations because they get to take US technology, produce it, familiarize themselves with it and innovate on it.
But it’s also a weakness that other nations, like China, can exploit.
It’s a really complicated subject with lots of upsides and downsides.
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