Mr. Trump is exaggerating the United States’ trade deficit with the rest of the world, and grossly mischaracterizing what a trade deficit represents. Over all, the United States ran a trade deficit in goods of $807 billion in 2017 and a trade surplus in services of $255 billion, for a net trade deficit of $552 billion. Over the past decade, the United States had a goods deficit of $724 billion and a net deficit of $518 billion — below Mr. Trump’s $817 billion figure. Simply put, a trade deficit occurs when a country imports more goods and services than it exports to another. The United States’ $552 billion trade deficit does not mean it has lost its wealth to other countries — a notion that “defies the most basic of economics,” said Scott Lincicome, a trade expert at the libertarian Cato Institute.

Source: New York Times July 26, 2018 23:48 UTC