Cutting the trade deficit by $300 billion, through domestic energy development and conservation and forcing China's hand on protectionism would increase GDP by about $500 billion a year and create at least 5 million jobs.
Longer term, large-trade deficits shift resources from manufacturing and service activities that compete in global markets to domestically focused industries. The former undertake much more R&D and investments in human capital.
Cutting the trade deficit in half would raise U.S. economic growth by one to two percentage points. But for the trade deficits of the Bush and Obama years, U.S. GDP would be 10% to 20% greater than it is today and unemployment and budget deficits not much of a problem.