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https://www.barrons.com/articles/europe-is-now-a-bigger-trade-villain-than-china-51558118723

The above articles state that trade imbalances are a bad thing and that if a government doesn't enact social and economic policies to make sure people are spending more instead of producing more it will lead to trade surpluses and these trade surpluses are a bad thing. The article mentions a decline in social aid spending and policies towards improving its manufacturing competitiveness. How does any of this make any sense? Is this just an opinion or do most economists agree with this assertion that countries should aim to reduce surpluses through consumption if a country like the U.S. has a major savings deficit?

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  • $\begingroup$ It’s basic accounting that not all countries can run trade surpluses. So arguing that large trade imbalances are destabilising does not imply any “obligation” to match the US in particular. $\endgroup$ – Brian Romanchuk May 28 at 10:38

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