The Trans-Pacific Partnership will have three signatory nations (Japan, Malaysia, and Singapore) that are flagrant currency manipulators, yet that trade agreement completely fails to address the issue. In 2013 the United States had a current account deficit of $400 billion (U.S. Department of Commerce, 2015). Of that total, $183 billion of the deficit was with China (The World Bank). The current account is the difference between the goods and services that the U.S. imports and those that we export, plus the difference between investment income paid to people in the U.S. from foreign countries and that paid to people in other countries from the U.S., plus miscellaneous other transfers, such as taxes paid across the border. The deficit with China is most obviously manifested in all the manufactured products on American store shelves “Made in China.” In 2014, the trade deficit with China in goods (excluding the other elements of the current account), was $343 billion. The goods deficit with China has exceeded $200 billion since 2005 (U.S. Census Bureau).
Current account deficits and surpluses between nations are not supposed to be large or persistent.
