The U.S. trade deficit has grown sharply over the years, and now routinely exceeds $60 billion a month, according to the government. By some accounts, red ink’s rise on the trade ledger portends trouble, if not calamity for the United States and perhaps the global economy when the trend reverses.
But while the trade deficit must eventually shrink, or at least stop growing, are the effects sure to be painful? Or could a reversal be relatively smooth and orderly?