No problem with US trade deficit, professor says

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Chinese President Xi Jinping and U.S. President Donald Trump attend a welcoming ceremony November 9, 2017 in Beijing, China.

‘What is the problem you are trying to fix?’

In the final three months of 2017, the U.S. current account deficit widened by more than analysts had anticipated. The U.S. Commerce Department said last month the current account deficit had risen by $26.7 billion to $128.2 billion. That’s approximately 2.6 percent of total national economic output.

When Hausmann was challenged on the point that the U.S. was actually paying to service its debt, he replied: “Yes, but they are making much more money on their investments abroad than they are paying on their liabilities abroad.”

Last month, President Donald Trump said via Twitter that trade wars were “good, and easy to win,” especially since Washington is “losing many billions of dollars on trade with virtually every country it does business with.”

However, in addressing the White House’s bid to try to reduce its current account deficit, Haussmann said: “What is the problem you are trying to fix? There is no fundamental problem you are trying to fix in the sense that there is no unsustainability in the current external position of the United States,” he added.