Less appreciated, however, has been the BRI’s potential to create the conditions for another sort of peril: a “trade deficit trap.” In contrast to a debt trap, a trade deficit trap is a situation where a country experiences an ever-widening trade deficit after its newly built infrastructure projects are completed. While many factors may affect the direction of trade balances, including a strong currency or weak productivity, this study focuses on the impact that BRI infrastructure projects might have had on national trade balances, particularly with China. Based on the study, there appears to be some correlation between a country’s participation in the BRI and a deterioration in its trade balance with China. Though economists still debate the exact consequences of a persistent trade deficit, if left unchecked, one could weaken a country’s economy.
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