A different take on trade (im-) balances
Rather than being a „rip-off“, trade balances between the US and the EU represent different business models, argue Matthias Diermeier, Michael Hüther and Markos Jung in their paper: „It’s business models, stupid!“ for the German Economic Institute. The US runs a surplus with respect to the European Union. This is largely driven by a positive service balance and primary incomes originating from US investments abroad. Services and primary incomes overcompensate the US goods trade deficit with the EU.