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OPINION

Opinion: A Trade Tutorial for Trump

U.S. President Donald Trump has declared that America’s $500 billion trade deficit with China means that the U.S. is “down” $500 billion. Apparently, he thinks that trade surpluses and deficits amount to profit-and-loss statements for countries. He could not be more wrong.

Let’s say that a developer, erecting an apartment building in New York City, purchases $50 million worth of construction material from China, and spends another $50 million on local services. If the developer then sells the building to American buyers for $110 million, he has made a profit of $10 million.

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