# US records highest trade deficit in history **URL:** \ **Category:** Politics & Elections\ **Created:** [March 6, 2019, 3:09pm UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630 "2019-03-06T15:09:30Z")\ **Posts on this page:** 8\ **Page:** 2
**Author:** ![Wrenching\_Spanners](https://avatars.discourse-cdn.com/v4/letter/w/ecb155/32.png) [@Wrenching\_Spanners](https://boards.straightdope.com/u/Wrenching_Spanners)\ **Post date:** [March 7, 2019, 6:08pm UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630/21 "2019-03-07T18:08:20Z")
> [@Try2B\_Comprehensive](#): > > Why [is] the trade deficit is That big a deal? I thought it wasn’t 😕 The US is big enough that it doesn’t need to trade. It could easily sustain itself as a closed economy. The reason the US trades with other economies is that it benefits from trade. The benefits are diverse, but the biggest economic factor is that trade allows the US to send low-value economic activity overseas, and concentrate on high-value economic activity. If the gain from concentrating on the high-value activity is greater than the amount paid overseas for the low-value activity, then the US wins from trade, even if it’s buying more low-value activity than it’s selling high-value activity. The first caveat to the above paragraph, is that when the US pays for low-value activity, it’s not paying directly with high-value activity but with wealth. So if overall wealth is increasing due to the gain mentioned above, the payments out don’t matter. However, if outward payments are greater than the internal gains, then the US is losing wealth. A long-term prolonged loss of wealth will eventually result in a shrinking economy, and the greater the wealth loss before the tipping point is hit, the severer the impact. The second caveat is that net economic gain isn’t uniform across the country. So, for example, the US software industry has undoubtedly been doing well, but bicycle manufacturing hasn’t ([https://aushiker.com/where-was-my-bicycle-made/](https://aushiker.com/where-was-my-bicycle-made/) ). If the gains are concentrated, but the losses are dispersed, then there could be an average gain, but a median loss. In other words, it’s possible that the winners are doing well, but there are more losers than winners. That also has long-term implications that will eventually result in a shrinking economy. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [March 9, 2019, 5:39am UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630/22 "2019-03-09T05:39:49Z")
Thanks for the answer. ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [March 9, 2019, 6:30pm UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630/23 "2019-03-09T18:30:30Z")
> [@iiandyiiii](#): > > Because he very specificially criticized the trade deficit and promised to reverse it. Haven’t you learned that you cannot cite facts to Trumpers? Of course, The economy was going down the tubes under Obama and Trump turned that around, right? And don’t just blame Obama, it was mainly Hillary’s fault. ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [March 9, 2019, 7:07pm UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630/24 "2019-03-09T19:07:35Z")
> [@septimus](#): > > IIRC Paul Krugman has called the trade deficit a bigger problem than the federal government deficit. > > As I wrote in another recent thread, the U.S. Dollar will continue to be the world’s safe haven currency. _Until suddenly it isn’t._ I yesterday’s Times, he thought it was no big deal, except as another indication of how little Trump is actually concerned with the trade deficit, except as a talking point. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [March 24, 2019, 11:27am UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630/25 "2019-03-24T11:27:38Z")
Think how much better you’d be doing under an intelligent president, and without the pending disaster that’ll hit only after this clown is out of office. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [March 24, 2019, 11:32am UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630/26 "2019-03-24T11:32:42Z")
> [@WillFarnaby](#): > > Krugman will say whatever is politically expedient. I’d be interested in seeing what you have to back up that statement. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [March 24, 2019, 12:58pm UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630/27 "2019-03-24T12:58:37Z")
> [@RTFirefly](#): > > I’d be interested in seeing what you have to back up that statement. When Krugman was expecting a Clinton victory, he continued his call for deficit spending. As soon as Trump won, he said “deficits matter again.” ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [March 24, 2019, 2:11pm UTC](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630/28 "2019-03-24T14:11:35Z")
Krugman called for a blanket 25% charge on Chinese imports. “But if sweet reason won’t work, what’s the alternative? In 1971 the United States dealt with a similar but much less severe problem of foreign undervaluation by imposing a temporary 10 percent surcharge on imports, which was removed a few months later after Germany, Japan and other nations raised the dollar value of their currencies. At this point, it’s hard to see China changing its policies unless faced with the threat of similar action — except that this time the surcharge would have to be much larger, say 25 percent.” > **[Opinion | Taking On China (Published 2010)](https://www.nytimes.com/2010/03/15/opinion/15krugman.html)** > > It’s time for America to confront China about the undervaluation of its currency, which is adding to the world’s economic problems at a time when those problems are already severe. [Previous page](https://boards.straightdope.com/t/us-records-highest-trade-deficit-in-history/830630.md?page=1)