Different ways of looking at trade deficits

Tim Taylor's Conversable Economist blog has some updated information about trade balances for the world's largest economies.  Germany ($296b), Japan ($196b) and China ($165b) run the largest surpluses in the world in absolute dollar amounts.  The US ($466B), UK ($107b) and Canada ($49b) run the largest deficits, again in absolute dollar amounts.

It is useful to compare these surpluses and deficits to the size of the relevant economy.  Germany's surplus represents 8.0 percent of German GDP, whereas China's accounts for a mere 1.4 percent of Chinese GDP.  Yet China has been cast as the rogue nation in the eyes of the President and much of the media.

As for the US, its trade deficit represents 2.4 percent of US GDP.   This is quite a bit smaller than the UK (4.1 percent).  Turkey perhaps has the biggest trade deficit challenge of any country at 5.6 percent of GDP.

Regrettably media discussions of trade deficits never consider the size of the deficit in relationship to the size of the country.  Turkey's deficit of $47.4 billion subjects its citizens to destabilization risk far beyond what any US citizen has to worry about.