In truth, our trade deficits benefit Americans

While the Trump administration’s economic policies are aimed at least partly toward eliminating the nation’s balance of payments deficits, Americans should understand that they benefit from those deficits.

A balance of payments deficit occurs when the value of goods imported exceeds the value of goods exported. In short, we are getting more than we are giving up, and that’s good for Americans.

We have to pay for those goods, of course, and one issue critics raise is that a balance of payments deficit means that American dollars are flowing overseas. That’s correct, but what happens to those dollars?