Balance of trade is commonly calculated by only considering goods [1]. America’s trade deficit is a deficit in the trade of goods; we usually have a services trade surplus [2].
When this administration has messaged [3] and made trade policy [4], it has used that goods-only view of trade, i.e. it ignores services.
Microsoft exporting Azure as a service has zero impact on how many goods America buys or sells. (If anything, it might increase the goods deficit if the servers Azure runs on, or the buildings its staff occupy, use any foreign components.) So by this administration’s accounting, the EU reducing its purchases of Azure is great if they e.g. buy two more Hershey’s bars. That’s economically nonsense, and that is the problem.
I think he is talking about the fact that Trump is screaming left and right that "EU iS ScREwINg US CiTIzeNs" because he merely takes into account trading of physical products, without showing the full picture. Basically if you consider services as well, the trade surplus is a few million euros only, because EU imports a lot of services from USA.
