In this election season when one of the candidates continues to insinuate that all the other countries are taking advantage of the US regarding trade, it is helpful to have some data. Below is Tim Taylor's comment on the graph (from his blog "Conversable Economist"):
"A fair number of Americans and politicians argue that a trade deficit is in large part a result of unfair trade practices by other countries. Essentially all actual economists disagree with that claim. Economists instead see trade deficits are arising from broad patterns of national production, consumption, and saving. A low-saving economy like the US consumes more than it produces--which it can do by running a trade deficit and importing more than it exports. A high-saving economy produces more than it consumers--which it can do by running a trade surplus and exporting more than it imports. Unfair trade practices can certainly restrict overall flows of trade, but they aren't a main cause of trade deficits and surpluses."
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