If you’re not already sure of what trade deficits are, or are simply always down for a quick refresher of information, an example of a trade deficit is as follows:
If the United States ships out $10 worth of goods to China, and China ships $12 to the U.S., the former country is in a trade deficit of $2, whereas China would have a trade surplus of $2. Neither country owes one another anything – trade deficits simply indicate how much economic output a country is responsible for.
The United States has a huge trade deficit with none other than the world’s most populated country, China, which is one reason why President Donald Trump hit goods coming from the country into the United States with excessive tariffs, collectively covering more than one thousand individual products.
According to Steve Mnuchin, the Secretary of the United States Treasury, he believes that trade tensions could soon resolve between the United States of America, China, and any other countries that currently are owed money in terms of trade deficit.
Such remarks by Mr. Mnuchin come just shortly after meeting with some of the highest-ranking, most popular leaders that have to deal with trade in between countries, all of which hailed from China, Japan, and various countries throughout the world.
According to historical analysis, the current trade war that China and the United States are effectively already entered into is the largest since since World War II, with each imposing trade barriers to the rune of $50 billion each.