How do we know if the United States is "winning" at international trade? If we ask that question about economic growth, the answer is pretty easy to find: You can look and see how much US gross domestic product (GDP) has increased. If we ask the same question about the labor market, we can look at the unemployment rate. So what is the equivalent scorecard for trade? Here's where economists part ways from most other people. Economists will answer the question by mumbling about national welfare functions and terms of trade gains. It will not be something that comes out in a monthly statistical release. Most noneconomists answer, "The trade deficit!" By their reasoning, if a country sells more than it buys (that is, exports more than it imports), that country is winning; similarly, a country that buys more than it sells is losing. So trade surpluses are good, and trade deficits are bad.
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