I want to push back just a bit on Martin Sandbu here -- When it comes to goods trade, Japan runs a deficit -- and the EU does too if tax inflated pharma is stripped out. The goods surplus is now incredibly concentrated in Asia, and China specifically ... 1/

There are a lot of reasons for the gap between the goods balance and the current account balance. Japan has a huge investment income surplus (why doesn't China tho?) and so on. But the gap here is enormously important ... 2/

For global goods trade to adjust (as Trump wants, tho he also likes the tariff revenue), Asia surplus (China's specifically) has to come down, some EMs need to join India in running persistent deficits or Europe has to swing into a bigger (non-pharma) deficit! 3/