But running trade deficit does not mean that the standard of living will be higher (in the long term).
That's true. But you are getting the cause/effect backwards. The trade deficit does not cause a higher standard of living in this country -- it is the result of a higher standard of living in this country.
Japan's recent history offers an excellent case in point, because it progressed from an "outsourcing destination" to a "high standard of living" in a very short period of time. It wasn't all that long ago (the late 1980s, to be specific) that people were complaining that Japan was going to "own the U.S." because so many of our manufacturing jobs had been sent there. The implicit assumption, of course, was that the economic advantages Japan enjoyed at the time would remain in place for a long period of time.
And yet it wasn't very long at all. Japan's status as an "outsourcing destination" pretty much ended when their standard of living (and hence, the cost of doing business there) began to approach that of the U.S.
It's utterly ironic that the one area where Japan competes on what is close to a level playing field with the U.S. is auto manufacturing, and Toyota is poised to surpass Ford as the #2 auto manufacturer in the world at the same time they are bulding record numbers of their vehicles in the U.S.