“…the US’s trade deficits are not due to cheating by trading partners, but to the excess of its spending over …Continue reading →
“…the US’s trade deficits are not due to cheating by trading partners, but to the excess of its spending over income: the biggest determinant of America’s trade deficits is its huge federal fiscal deficit, currently at around 6 per cent of GDP.”
– Martin Wolf, Financial Times, March 4, 2025
U.S. total fiscal deficit, 2024: 4.8% of GDP*
U.S. global trade balance, 2024: -$982 billion
China total government deficit, 2024: 7.2% of GDP**
China global trade balance, 2024: +$990 billion
* Includes federal deficit of $1.83 trillion minus state surpluses of $473 billion.
** Includes national deficit plus “special government bonds managed under the Government Funds Budget, which is dominated by local governments….”
(Sources: “The economic costs of Trump’s assault on the global order,” by Martin Wolf, Financial Times, March 4, 2025, https://www.ft.com/content/2389b7f1-e38e-43d9-ba95-b39b5ea7d5e6 ; calculated from “What is the national deficit,” Fiscal data, National Deficit | U.S. Treasury Fiscal Data and “Summary: Fall 2024 Fiscal Survey of States,” National Association of State Budget Officers, December 18, 2024, Fall_2024_Fiscal_Survey_Summary.pdf and “Gross Domestic Product, 4th Quarter and Year 2024 (Second Estimate),” U.S. Bureau of Economic Analysis, February 27, 2024, Gross Domestic Product, 4th Quarter and Year 2024 (Second Estimate) | U.S. Bureau of Economic Analysis (BEA) and “Monthly U.S. International Trade in Goods and Services, December 2024, U.S. Bureau of the Census, February 5, 2024, Foreign Trade Press Release Page; “China’s official deficit is no longer a meaningful measure as its budget system evolves,” by Tianlei Huang, Peterson Institute for International Economics, March 19,, 2024, https://www.piie.com/research/piie-charts/2024/chinas-official-deficit-no-longer-meaningful-measure-its-budget-system; and “China’s Trade Surplus Reaches a Record of Nearly $1 Trillion,” by Keith Bradsher, The New York Times, January 12, 2025,https://www.nytimes.com/2025/01/12/business/china-trade-surplus.html?unlocked_article_code=1.1U4.gok-.AUR9n1FyhavX&smid=url-share)
