Deutsche Bank: US Trade Deficit Doesn't Capture True Size of Its Business Interests
According to economists, the US goods and services trade deficit does not reflect the true size of the country's business interests. According to Deutsche Bank, the US has a surplus of $20 billion with China and $1.4 trillion with the rest of the world. The US also registered an annual deficit of more than $330 billion with China and about $550 billion with the world last year.
Deutsche Bank estimates that instead of a growing trade deficit with China, there was a small but growing surplus. This increase was reflected in the growing demand of Chinese households for foreign goods and services, partly contributed to the welfare effect of China.
President Donald Trump’s determination to rein in his nation’s trade deficit has put him at odds with the developed world, a stance that undermined an acrimonious G7 summit in Canada last weekend. China and the US are meanwhile locked in negotiations to stave off a trade war, with Trump threatening to slap tariffs on at least $50 billion in Chinese imports after June 15.