San Diego experts weigh in: Do U.S. trade deficits really matter?

2017-03-17 Econometer
This aerial photo shows new cars in a parking lot in Shenyang, northeast China’s Liaoning province. China recorded an unexpected 60.36 billion yuan trade deficit in February, activity at as factories and ports slowed during the Lunar New Year holiday. (STR / AFP/Getty Images)

Question: Do trade deficits matter?

Bob’s Answer: NO

It’s not worth worrying about a trade deficit because it just means we import more than we export. While we have a large current trade deficit with China in particular, a strong economy is more important than a trade surplus. Our current deficit is largely due to the strength of our economy. While China’s policies create an even larger trade deficit, growing the economy should be our goal, not restricting trade or foreign ownership.

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