Why Does the U.S. Always Run a Trade Deficit?

Thomas Klitgaard

No 20250520, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The obvious answer to the question of why the United States runs a trade deficit is that its export sales have not kept up with its demand for imports. A less obvious answer is that the imbalance reflects a macroeconomic phenomenon. Using national accounting, one can show deficits are also due to a persistent shortfall in domestic saving that requires funds from abroad to finance domestic investment spending. Reducing the trade imbalance therefore requires both more exports relative to imports and a narrowing of the gap between saving and investment spending.

Keywords: trade; exports; imports; current account; deficit; balance; saving; investments spending; trade policy; international; macroeconomics (search for similar items in EconPapers)
JEL-codes: F4 (search for similar items in EconPapers)
Date: 2025-05-20
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