The truth about trade deficits: Why trade imbalances are not always bad

Traders on the floor of the New York Stock Exchange on May 31, 2019.
Traders on the floor of the New York Stock Exchange on May 31, 2019.PHOTO: AFP

Focusing on trade deficit alone is myopic and tariffs will not bring jobs back to US, say economists

At the centre of the ongoing trade dispute between the United States and China is US President Donald Trump's claim that it loses US$500 billion (S$685 billion) to China every year. He has promised to cut the trade imbalance to bring factory jobs back to the country, boosting its economy.

The US trade deficit with China is not the only one that President Trump has taken issue with. In his visit to Japan last month, he rapped his host for its "substantial edge" over his country in trade.

Please or to continue reading the full article. Learn more about ST PREMIUM.

Enjoy unlimited access to ST's best work

  • Exclusive stories and features on multiple devices
  • In-depth analyses and opinion pieces
  • ePaper and award-winning multimedia content
A version of this article appeared in the print edition of The Straits Times on June 04, 2019, with the headline 'The truth about trade deficits'. Print Edition | Subscribe