The U.S. is wasting its time trying to fix a non-existent problem regarding its current account deficit, according to an economics professor at Harvard University.
A number of U.S. policymakers have sought to justify stoking a trade war with China in recent weeks, saying it is "unfair" for the world's biggest economy to have a current account deficit — which measures the flow of goods, services and investments into and out of the country — with Beijing.
A tit-for-tat trade standoff between the U.S. and China has fueled market fears that the dispute could soon spiral into a full-blown trade war — with market participants also concerned about the potential impact on global economic growth.
"The U.S. has borrowed $9 trillion over the past 20 years, supposedly to cover its current account deficit, so you would expect to see that it now has to pay an interest on those $9 trillion it supposedly borrowed," Ricardo Hausmann, director of the Harvard Center for International Development, told CNBC's Steve Sedgwick on the sidelines of the European House Ambrosetti Forum in Italy on Friday.
"But the U.S. isn't paying a cent. It is actually making more money out of its financial position than it was doing before," he added.