However, the administration has also emphasized its desire to reduce the trade deficit — the degree to which the United States imports more than it exports — in NAFTA renegotiations. For starters, a powerful economy such as ours often runs a trade deficit because of the immense buying power of its people. When a Canadian company decides to invest in a U.S.-based company, it increases our trade deficit. Similarly, when the Mexican government buys U.S. Treasury bonds (as most of the world does), the likelihood of an American trade deficit increases. But setting up additional barriers and taxes on imports to reduce the trade deficit should not be the focus of our trade policy.

Source: Washington Post August 14, 2017 23:15 UTC