Scenario 2: I exchange 500$ for a television with a Chinaman. He converts them to Euros and buys a German blender. The Japanese money-changer who bought his USDs buys American clothing for 500$.
"trade deficit" with China: 500$, but for America the situation is exactly the same: buy 500$ (TV), Sell 500$ (clothing). The "trade deficit" is for economic illiterates and special interests (especially manufacturers) exploiting the useful idiots.
Here we have beautifully illustrated the unilateral free traders' 1st law of thermodynamics. Add to this the brand new science of nano-economics, and we have the neocon trade policy in a nut shell.
No pun intended.