Newsroom: Industry News
There’s almost no economic subject that causes more confusion and expressions of ignorance than the trade deficit. Every time any of us writes about it we get deluged with comments insisting that the deficit makes us all poorer, that it reduces the number of jobs in America, that we only pay for it by borrowing, even that the deficit causes the government to borrow from China. Absolutely none of that is true in the slightest and here’s the reason why. The U.S. trade deficit is largely paid for by Europeans investing in American manufacturing. Yes, I know, sounds odd but it is in fact true.