According to Money CNN, President Donald Trump often cites the U.S. trade deficit as a sign that America is losing to China, Mexico and other countries on trade. He uses it to justify renegotiating trade deals and slapping tariffs on other countries’ products.
And the gap with Trump’s two favorite rhetorical trade targets, Mexico and China, is getting bigger. The overall trade deficit with Mexico is up 11% this year, and the deficit with China is up 7%.
A trade deficit doesn’t mean the United States is losing money to China or Mexico, which is how Trump sometimes framed it during his presidential campaign. It means American businesses and consumers bought more goods and services from Mexico or China than those countries’ consumers bought from American businesses.
Trade experts say the deficit is not an appropriate way to value a trading relationship. The Trump administration disagrees.
Source: Money CNN