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  • trade deficit

    Trade Deficit Doesn't Matter - Trade Freedom Does

    On February 8, the government will release data on imports and exports for 2012. This annual release often ignites a misguided debate about trade deficits. A recent news report perpetuated a popular misstatement about how international trade works: Net imports suck cash out of the economy, subtracting from gross domestic … More

    Global GDP: U.S. Adds, China Subtracts

    China’s 2012 official economic numbers are due out at the end of this week and I, among others, will gently suggest that they aren’t particularly accurate. Sometimes, however, it isn’t Beijing that can’t get basic economic facts right. Sometimes it’s us. A lot of foreigners believe China is contributing a … More

    Don’t Believe What You Read: Bigger Trade Deficit = More Economic Growth

    The latest trade deficit figures are out, and like always, most reporters fail to accurately explain what these numbers mean. During the past 10 years, there has been a clear relationship between trade deficits and U.S. economic growth. Most news coverage got the relationship backwards. Consider the following reports: “The … More

    Chart of the Week: Major Benefits of Free Trade

    Nations that embrace international trade enjoy significantly stronger economies, achieve lower rates of hunger, and maintain a better stewardship of the environment, according to new data published by Heritage for the forthcoming Index of Economic Freedom. There are, of course, other factors that contribute to such positive trends. But international … More

    Fact Checkers Get It Wrong on Jobs and China

    Who fact-checks the fact checkers? After the debate Monday night, CNN engaged in a fact-checking exercise. Many criticize these exercises for being more slanted and less accurate than what’s being fact-checked in the first place, and sure enough, this is what happened with China trade and jobs. CNN, for example, … More

    Morning Bell: Shocking News! Trade with China Supports U.S. Jobs

    The presidential debate yesterday moved to trade with China, with the usual rhetorical suspects—including “outsourcing” and the “trade deficit”—taking center stage. President Obama announced that his Administration had filed a complaint against China with the World Trade Organization. But a groundbreaking new report from Heritage proves that importing goods from … More

    Budget Deficits vs. Exports

    The federal government recently announced that it is expected to run a budget deficit of more than $1 trillion for the fourth straight year. One often-overlooked result of these large budget deficits is their negative impact on U.S. exporters. Sales of U.S. Treasury securities to foreigners are not counted as … More

    Is the Trade Deficit a Drag on the U.S. Economy?

    Popular opinion demonizes the U.S. for importing more goods than it exports, or running a “trade deficit.” This view maintains that the trade deficit is costing jobs and slowing economic growth. “The $600 billion annual deficit is the most significant barrier to achieving a robust economic recovery and creating jobs,” … More

    Trade Deficit Increases. . . or Does It?

    The U.S. Bureau of Economic Analysis (BEA) just announced that the country’s current account deficit for 2011 was $473.4 billion. This number includes transactions like exports and imports. Cue the “sky is falling” headlines. However, the BEA did not point out that the overall U.S. international transactions deficit was $0. … More

    Trade Deficit Decrease May Reflect Weak Economy

    Today the U.S. Bureau of Economic Analysis announced that the trade deficit for July fell by $6.8 billion. Exports increased by $6.2 billion and imports decreased by $500 million. Historically, decreasing trade deficits are often a sign of economic weakness. When workers are unemployed, they have less money to spend. … More