I mean the currency itself is an asset for the trade surplus country, it can sell it for other currencies too depending on the liquidity of forex markets. i don't think unbalanced trade is that bad either, smaller countries with less resources will run trade deficits when being helped out by larger neighbors. (Like Cuba and USSR). Of course, under capitalism the purpose of trade is for the exporting country to earn foreign currencies and dump excess supply, but that doesn't have to be the case.

The problem here is that nobody wants to accumulate a currency that they cannot use, and this most often means the poorer, weaker countries.

Let’s take Russia and India for example. Russia has accumulated a huge surplus of Indian rupees since the Ukraine war by selling cheap oil to India, but it soon ran into the problem of not being able to spend them because India no longer has anything else that Russia wants.

What should Russia do with the extra rupees? You can say, why not use them to buy yuan?

But there are two problems here: first, Russia is already running a trade surplus with China (China export to Russia in 2023 was $111B while its import from Russia was $129B). In other words, Russia already has more yuan than it can spend, so there is no reason for it to buy more yuan on the forex market.

On the other hand, it is worth remembering that the US dollar is the most desirable currency (the global reserve currency) and you can use it to buy pretty much anything from anyone, but with yuan you can only buy from China.

The second problem is that China is itself running a huge trade surplus against the US and Europe, which means that there is less yuan in circulation around the world, so buying them on the forex market is nowhere near as easy as buying the vastly more liquid US dollar.

There is a reason why the US dollar is the most desirable and convenient asset for most of the world, because everyone wants a piece of it, so you can find it anywhere, and use it to buy anything. No need to worry about not being able to spend the money in the future.

So, to accumulate a currency that your country cannot use means that an x amount of your country’s labor and resources are spent to produce real goods and services for another country to enjoy, but you earn back something that you cannot spend - i.e. not something your own citizens can enjoy. Put it another way: your own labor worked harder to provide for another country for free and get nothing in return. In this case, that x amount of labor and resources would be better spent at building domestic economy, since the whole point of foreign trade is to get things you cannot produce at home.

The only reason you’d want to do that is because of ideological alignment, or strategic/geopolitical interests, which is exactly what happened in the case of Cuba and USSR that you raised. Beyond that, it means a waste of labor and resources that could have been utilized to improve domestic economy.

In other words, as the linked commentary suggested, only a bancor-like mechanism would solve this trade imbalance problem, but we come to another problem here: bancor mechanism would punish countries with huge trade imbalances - in this case: US and China. US as a huge net importer would no longer be able to abuse its financial power and get “free lunches” across the world anymore, but China as a huge net exporter would also have to redistribute its productive capacity to the developing world.

Clearly, neither the US and China wants to give up the privileges of this specific economic arrangement that they have enjoyed since the normalization of US-China relations back in the 1970s. And because the US and China are the two great economies that matter (sorry to the other countries, but that’s the truth), we’d have to wait until a complete breakdown in the US-China relationship for this to happen. But if we truly were to get to that point, it might have been too late for the world already.