For a paper with its antecendents this is not a good look:
Do trade deficits matter?
Many economists would argue trade deficits are an irrelevance, although surpluses are often seen as economic virility symbols.
Persistent deficits require funding via international borrowing, which becomes harder if confidence in a country falls.
No, absolutely not, go to the back of the class. Given the paper's history this is bad too. For it was founded, as the Manchester Guardian, to argue against the Corn Laws. That is, in favour of free trade.
It is entirely true that a trade deficit must be financed but that it requires borrowing is a horribly misleading untruth. Any current account deficit must be - and will be - offset by an equal and opposite capital account surplus on the grounds that the balance of payments really does balance (yes, it's more complex, but really, this suffices).
OK, but doesn't this require that we borrow money from foreigners? Nope, no it doesn't. It requires that foreigners send their capital into the country. And they can buy stuff. Or even build it. Foreign Direct Investment for example, say a Japanese car factory built Oop North, or some Johnny Foreign buying a flat in London to leave empty. This is capital flowing into the country this finances that trade deficit £ for £ because that's just how that balance of payments thing works.
Of course, we might end up selling the entire country, as Warren Buffett has posited with his Squanderville idea.
The UK trade deficit is some £30 billion a year. Hey, why not exaggerate, let's call it £100 billion, whatever. We must therefore sell that amount of our wealth to finance it each year - in the most restrictive version of this story that is. How much wealth do we have?
Aggregate total net wealth of all households in Great Britain was £12.8 trillion in July 2014 to June 2016
Oh, we can do this for a pretty long time then. A century and more before we're broke.
up 15% from the July 2012 to June 2014 figure of £11.1 trillion.
Actually, we can do this forever. Note that households do the consuming so yes, household wealth is the correct stock we've to use to pay for it. We're creating new wealth at some £1.5 trillion every two years, £750 billion a year say. Of which we've got to flog off £30 billion (hey, why not, call it £100 billion!) to foreigners to finance the trade deficit.
We can not only do this forever, as we do so foreigners will end up owning an ever smaller portion of the capital owned by the people of the country. For we're creating the wealth faster than we spend it.
So, err, yes, trade deficits are an irrelevance. Free trade it is then.