… is from page 129 of the 2nd edition (1997) of Jim Cox’s The Concise Guide to Economics:
There is no such thing as a trade deficit. The nature of trade is such that each party will make an exchange only if the good received is of greater value to the trader than the good surrendered. Therefore, all trade generates a surplus; each party gains from a voluntary transaction. The theory of the trade deficit is a misapplication of accounting to economic theory.
DBx: Oh, there is indeed a very real accounting convention the use of which results in reports of “trade deficits” (or “current-account deficits”). Only in this artifactual sense are trade deficits real. That is, a trade deficit is real enough as an artifact, as an accounting convention. But despite the bottomless pools of ink that are spilled writing about trade deficits, and the untold amount of hypertension that is stoked by reports of trade deficits, trade deficits should be no more scary than are fairytale demons or fantasy monsters.
Nothing, however, can be more absurd than this whole doctrine of the balance of trade.