Looking in All the Wrong Places to Reduce the US Trade Deficit

Explaining why trade deficits occur is not easy. Common sense seems to suggest that if America stopped importing oil, or erected new barriers to imports, or encouraged more domestic production, the trade deficit would shrink. But as economists have tried to explain for years, trade deficits result when a country spends more in total than it produces, and since the US addiction to foreign borrowing is persistent, piecemeal efforts are unlikely to reduce the US trade deficit. Trade policy cannot reduce the trade deficit. If the trade balance is viewed as a problem, the United States must either save more or invest less.