Yes, the current account deficit is just a mirror image of the capital account surplus, just like how the government deficit is a mirror of the non-government surplus. Balances, as they say, balance. As a point of logic, the foreign sector has to save its U.S. financial assets(i.e. don't buy stuff from us with the dollars they got selling us their stuff) in order for there to be a foreign sector surplus. If they sell us more stuff than we sell them, we get more stuff from them then they do from us, and they get more dollars from us than we get from them. So you really can't say that unfair trade practices, cheap foreign labor, or currency manipulation could be CAUSES of the foreign sector's surplus. But you could say that demand for U.S. assets drives foreign nations towards unfair practices, cheap labor, and or so-called "currency manipulation," which aids in their ability to accumulate surpluses. Export nations have to purchase fx to support exchange rates or the fundamentals drive up their currency, making their goods more expenses in terms of the currency of those importing their goods. So there has to be a conscious decision to save in the foreign currency that precedes exchange rate "manipulation."
Why is the world offering us this enormous net-benefit?
We're the largest economy in the world. Our stock market is half of the world stock market. Much of the world operates on fixed exchange regimes and borrows in U.S. dollars (we've done a lot to organize that in the post WWII world). Our military is all over the globe spending dollars. And there's a whole lot of nations with less political, economic, and legal stability than the United States of America.
Other nations have chronic shortages of vehicles for savings; there is a general world-wide shortage even with the United States. Demand leakages are a world-wide issue. Every neoliberal ran economy (probably all of them except for North Korea) around the world sucks right now and has sucked for some time. And it all comes back to the Deficit Terrorism that western educated neoliberals have put in place around the globe. But I digress......
The moral problem with taking advantage of this enormous benefit these nations offer the United States is that it comes at the expense of foreign people's real standards of living. There is a legitimate basis for trade restrictions based on environmental protections and human rights. That's something that I think Bernie Sanders best understands, if not the economics of it all.
The problem is we do not take advantage of this enormous benefit, because of the Deficit Terrorist restrictions on running the appropriate offsetting government budget deficits. So not only are foreigners worse off in real terms, but so are many of our own, fueling global inequalities. Because of our trade deficits, taxes can be lower or government spending can be higher. And they need to be, the fiscal adjustment needs to be proactive, as opposed to bleeding out government deficits through recession reactively.
The actual economic mainstream framework that says "free trade" is good assumes full employment conditions. So if we don't have full employment, we have a problem.
Hopefully, Stephanie Kelton is having a conversation with Bernie about the MMT view on trade, which she's been writing about for over a decade. Please see the following:
"When Exports Are a Cost and Imports Are a Benefit: The Conditions under Which Free Trade Is Beneficial"
"RE-ESTABLISHING THE GROUNDS FOR FREE TRADE: THE (FORGOTTON?) ASSUMPTION OF FULL EMPLOYMENT IN MAINSTREAM THEORY*"
Bernie is politically constrained and has given the "I can't say that" answer before to the headliner MMT'ers.
Generally, I subscribe to Lerner's Law: never concede scientific principle. And that means telling the truth when scientific principle is at stake. So I cannot endorse Bernie's balancing act of accepting MMT truths privately and saying the political acceptable things and raising political capital on grounds I reject. But I can see why a politician would want to move quietly on this knowledge and why maybe an election year debate is not the place for this. You have to be willing to put out the sufficient effort to advance the football in political combat and debate. MMT people need to be as quick to go on the attack as our opponents are ready to pounce with the rabid half-truths and the vast assortment of false arguments and intellectual dishonest attacks MMT is subject to on a daily basis. We just don't have the media organization to break out of the box. There's more wrong with the world than just our understanding of money. So MMT is largely pocketed to the internet and small policy circles around the globe. Sanders relationship with MMT shows he is politically pragmatic. A seat at the President's table is worth a concession or two to the political realities we face.
But you either believe in telling the truth or you are some sort of subversive.