U.S. Trade Deficit Is Considered Very Harmful

What is the balance of trade? The balance of trade is the monetary value of exports and imports of an economy over a given period of time. A country can have a trade surplus or it can have a trade deficit.


Source Of Chart:  Wikipedia

If the U.S. trade deficit is not harmful to the United States, why then is the U.S. in so much debt? China and Japan exclusively own 44.80% of U.S. debt.
Note: China and Japan are the leading countries contributing to U.S. trade deficits. Is this correlation just a coincidence?

Top 10 Foreign Owners Of U.S. Debt  (Jan 2009)
Debt Owner(s) / Billions Of US Dollars $$
1. China / 739.6 *
2. Japan / 634.8 *
3. OPEC / 186.3
4. Caribbean Banks / 176.6
5. Brazil / 133.5
6. United Kingdom / 124.2
7. Russia / 119.6
8. Luxembourg / 87.2
9. Taiwan / 73.3
10. Hong Kong / 71.7

Top 10 Countries U.S. Trade Deficits  (Jan 2009)
Country / Millions Of US Dollars $$
1. China / - 20,569.89 *
2. Japan / - 4,302.13 *
3. Mexico / - 2,684.00
4. Canada / - 2,489.90
5. South Korea / - 1,936.51
6. Germany / – 1,664.65
7. Ireland / – 1,549.12
8. Taiwan / - 1,340.61
9. Saudia Arabia / - 1,290.57
10. Italy / - 1,248.75
Total Trade Balance Of January 2009 = deficit of $36 billion

Source: The New York Times (March 14, 2009)
BEIJING — The Chinese prime minister, Wen Jiabao, spoke in unusually blunt terms on Friday about the “safety” of China’s $1 trillion investment in American government debt, the world’s largest such holding, and urged the Obama administration to offer assurances that the securities would maintain their value.

Congress denies that trade imbalance destroys jobs, yet there is never any real data ever presented to the public. Former presidents have denied that there have been job losses as a result from trade deficit. This is very problematic.

Source: U.S. Dept. of Commerce & U.S. Bureau of Labor Statistics
1979 – 1995 Statistics
Imports: $212 billion – $749 billion = $1.7 trillion trade deficit
Manufacturing Jobs: 21 million – 18.4 million = 2.6 million job losses

The US trade deficit hit a record high of $817.3 billion in 2006.