Excerpted from Wikipedia’s “Balance of Trade” article:
“Trade balances effects upon their nation's GDPs.
Exports directly contribute and imports directly reduce their nation's balance of trade (i.e. net exports). A trade surplus is positive net balance of trade, and a trade deficit is a negative net balance of trade. Due to balance of trade being explicitly added to the calculation of their nation's gross domestic product using the expenditure method of calculating gross domestic production (i.e. GDP), trade surpluses are contributions and trade deficits are "drags" upon their nation's GDP”. …
… Refer to:
http://www.bea.gov/methodologies/index. ... ional_meth
Is there any net economic benefit to a nation’s chronic annual trade deficits of goods?
If a nation experienced an annual negative balance of global trade, (i.e. a trade deficit), that nation’s GDP was less than otherwise. A lesser GDP reflects upon, and is reflected upon by the nation’s lesser numbers of jobs during that same year. I’m unaware of any nation that enjoyed full employment while experiencing an annual trade deficit.
Proving trade deficits are beneficial or not detrimental to nations’ GDPs by statistical “proofs” are based upon specious reasoning.
[Within a nation’s markets, both their domestic and imported goods are sold. (We have no general rules applicable to aggregate types of goods and the proportional volumes between domestic and imports sold within each nation’s domestic markets during each of their markets differing conditions].
Generally, we expect that during a nation’s periods of improved GDP, the sales volumes of their domestic markets similarly improve; when their GDPs are stagnant or declining. we expect those sales volumes to similarly be stagnant or decline.
Demonstrating trade deficits are reduced during times of lesser national GDPs only indicates that less imports are sold within the nation’s domestic markets during those periods.