Economics books often quotes import as a borrowing

Why it is borrowing since the importer pays to exporter for the goods they have received. Lets say, a US company is importing apparel from China.

  • $\begingroup$ Can you site where it says this? Governments may actually sell bonds to foreign investors. Also relative to some system, money printed by government is leaving, so more money needs to be produced by the government typically narrowed. $\endgroup$ – marshal craft Dec 21 '17 at 17:37

You are right. There is nothing in "importing" which is intrinsically related to "borrowing". If economics books often quotes this, it is because they make an accounting-like shortcut (under assumptions of balanced public accounts) that is representative of the USA-China case.

On the one hand, USA has a net negative trade balance with China, i.e. USA is "net-importing" from China. On the other hand, the "U.S. debt to China is $1.2 trillion as of August 2017".

The accounting-like shortcut consists of saying that USA debt to China is actually used to import goods from China. This is not the factual reality, but an accounting one. The real story behind is that actually, when importing goods from another country, a U.S. private company is not doing so from a local one who would pays taxes and thus generates tax income for the U.S. government, which would in turn allows it to contract less debt and so on...

  • $\begingroup$ So, why trade deficit is an issue -- why importing goods from other nations is an issue? $\endgroup$ – AbrahamH Dec 24 '17 at 7:36
  • $\begingroup$ So, $1.2 trillion debt and net neg. trade balance with China are two different things. Is my interpretation correct? $\endgroup$ – AbrahamH Dec 24 '17 at 10:24
  • $\begingroup$ @AbrahamH. Importing goods from another nation is not an issue and debt is not an issue neither, too much debt is. The definition of too much is another question. And your last interpretation is correct: they are interrelated but are two different things. $\endgroup$ – keepAlive Dec 24 '17 at 10:45
  • $\begingroup$ Any other question @AbrahamH ? $\endgroup$ – keepAlive Oct 17 '19 at 11:37

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