Comment by DebtDeflation

> Since trade is conducted largely in USD, that means other governments must purchase USD to trade.

This is just one facet of a broader point. When people talk about a "trade deficit" what they are really talking about is what's known in Economics as a "Current Account deficit". When discussing international trade and Balance of Payments, there are two accounts - Current Account (goods and services flow) and Capital Account (asset and liability flow). By definition, the two must net to zero. That's not an equation, it's an identity. If you have a Current Account deficit then you have an equivalent Capital Account surplus. It works in both directions. For example, foreign direct investment into another country in the form of a loan leads to a flow of funds into the country (Capital Account surplus) and then those funds are used to buy things (import) from the first country or other countries, leading to a Current Account deficit.