US President Donald Trump suffers from an acute strain of trade deficit disorder. He blames America’s ills on trade deficits and the bad deals that underpin them. Not only is this poor economics, drawing heavily on the fearmongering of White House senior trade adviser Peter Navarro, it threatens the stability of a still-fragile global economy.

The US has trade deficits with 101 nations. This is not a bilateral problem, as the Trump administration insists. It is a multilateral one. This profusion of deficits reflects a far deeper problem: the US’s saving deficit. In the third quarter of 2016, its net domestic saving rate stood at just 3 per cent of national income, less than half the 6.3 per cent average that prevailed over the final three decades of the 20th century.

Lacking in saving and wanting to grow, the US must import saving from countries like China, Germany, and Japan, which have big surpluses. But it must run a massive balance of payments deficit in order to attract the foreign capital. Since 2000, the cumulative $8.3tn balance of payments deficit has been almost identical to the $8.6tn multilateral trade gap over the same period.