WORKING PAPER 25-14 The US Trade Deficit and Foreign Borrowing How Long Can It Continue? Tamim Bayoumi and Joseph E. Gagnon July 2025 ABSTRACT The United States has run significant external deficits for half a century and the associated net international liabilities have been growing, especially recently. Yet, in contrast to earlier periods when the deficit was rising, few economists have expressed concerns about external sustainability lately. This paper explores the drivers and risks associated with the d ...