But this is not the case at all. It is a mutually beneficial transaction. Both you and the grocer are winners. Another misunderstanding involves trade-deficit figures. Most of the money made from this sale stays in the United States.
Protectionists claim trade deficits are a major cause of unemployment.
History shows, however, that unemployment typically drops as the trade deficit rises. For example, while the trade deficit leaped from 1983 to 1984 and peaked in 1987, the U.S. unemployment rate fell from 9.6 percent in 1983 to 5.5 percent in 1988. When the trade deficit began to shrink from 1989 to 1991, unemployment rose from 5.3 percent 6.7 percent. When it began to rise from 1992 to 1994, unemployment shrank from 7.4 percent to 6.1 percent. U.S. policy-makers often use Japan as an example of how a country can eliminate trade deficits by managing trade and industry.