Well, technically an $817B trade imbalance means we paid $817B MORE for their stuff than they paid for ours. Was every dollar of it paid "voluntarily" with full consumer knowledge and without any manipulation of the prices?
Obviously, it's oversimplified and dramatic for Trump to portray every one of those 817 billion dollars as a ripoff, but rarely does one see international trade discussed from any perspective without oversimplification and dramatics.
Trade imbalances can be caused by many factors. If it's because the country with a trade deficit is flush with cash, hungry for foreign goods, and making purchases with eyes wide open, it's less of a problem - but are unfair practices luring consumers away from domestic sources?
I remember trade deficits were part of Bill Clinton's "worst economy in the last 50 years" campaign against Bush. It's a very old game to use them for political leverage without digging into exactly why the trade deficit is high, or what can be done about it.
Which leads to the question of whether anything CAN be done to address a trade deficit, whether the corrective measure is worth the cost in the short and long term (two very different questions!) and who will pay it. All of which are questions we should be asking today.
We also should remember that the cost of foreign goods may be paid not just in cash (short-term cost) but in CAPITAL (long-term cost, loss of manufacturing capacity, jobs.) Capital is not so easily recovered, and pain of its loss may not be felt for a long time.
The traditional conservative/libertarian approach is to reduce the burden on domestic business to make it more competitive, but that theory hits practical limits against competitors with lower regulatory burdens than Americans would ever accept or support from mercantile states.
I'm not a fan of tariff wars as a solution to trade deficits, but I do think saying every dollar of a massive deficit is undiluted good is as simplistic as claiming every dollar is international theft. Politics distorts economics by obscuring costs and overhyping benefits. /end
Addendum: there's always a strategic component to international trade, so it's not purely an economic consideration. The money China gains through trade deficits is being used for purposes antithetical to American interests with a very long-term horizon on the strategy.
Some degree of economic pain might be worthwhile to drain the cash China is using to reshape the world (which could be seen as making an investment today to protect the economy of tomorrow.) This could be our last chance, or it might already be too late.
The Chinese most certainly do see trade and economic policy as instruments of global strategy, and they think long-term. They will accordingly take domestic measures that seem economically unsound to manipulate trade because the benefit is strategic. /end
