Outside of barter, there are all kinds of money exchanges in an economy. Employees run a money surplus with their employers. Businesses run money deficits with their suppliers and employees. There are also exchanges that have nothing to do with goods and services, such as a depositor putting money in the bank (depositor runs a deficit, bank runs a surplus) or the government borrowing money (government runs a surplus, lender runs a deficit).
So anytime someone claims Americans are getting ripped off by foreigners, consider perhaps the most successful company in the history of capitalism, Apple. Apple does A LOT of business in China (16% of total revenue). They run deficits with Chinese suppliers and surpluses with Chinese consumers. Everyone is happy.
But then Apple does something unforgivable: it imports iPhones to the U.S. for sale to its customers! Again, everyone is happy. In fact, because everyone Apple touches through money exchanges is happy - suppliers, employees, customers - the company is wildly profitable. And that makes investors happy. How happy? Until Trump's trade war, Apple was valued at $3.6 trillion, the most of any company in the world. Today, that's down to $2.8 trillion. This makes total sense that shareholders have seen $800 billion of their wealth evaporate in 2 months: Apple is in the crosshairs of a trade war which mainly targets China.
A "trade deficit" is an accounting fiction, a contradiction in terms. When Apple imports an iPhone and sells it in the U.S., it's counted by the U.S. Bureau of Economic Analysis, but when Apple sells an iPhone in China, it's not. Using worthless trade statistics as an excuse to diminish trade is dangerous folly.
~ Kevin Duffy, Facebook post, April 6, 2025
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