Abstract: Trade imbalances among major powers often lead to significant spillover effects and friction between nations, and historically, persistent and significant trade imbalances have been important sources of international disputes. By analyzing the surplus cycles of four typical great powers - Britain, the United States, Japan, and Germany - during different historical periods, this paper points out that when trade imbalances cannot be quickly or fundamentally eliminated, countries with large surpluses need to find appropriate ways to circulate their surpluses. Whether through foreign investment, foreign aid, shifting from exports to overseas production, or circulation within a currency zone, these are important means by which great powers can achieve balanced trade and reduce friction through a degree of interest concession. In addition, increasing domestic demand is also an effective way to absorb surpluses.
