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It's the value of production within the physical borders of the United States, so therefore if you have, hypothetically, exports that are flat and higher imports, then your trade deficit is rising. In that sense, a rising trade deficit subtracts from GDP, when you have highly fluctuating commodity prices, and especially in periods of high inflation in general, then it can be misleading and, in my opinion, paint an overly negative view of where The US economy is.

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    I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.
    A Charles Dickens
    B Oppenheimer
    C Joseph Stalin
    D Albert Einstein