The U.S trade deficit is set to grow, because the country will consume more foreign goods as its economy gets bigger, Rajan said.

The United States is likely to run a big fiscal deficit as well, because of tax cuts and high employment, he said. That deficit will in turn feed into the current account deficit and the trade deficit.

“If that’s how they measure their success, well, things are going to get worse, because they’re going to see that the trade deficit is going to expand. It’s not because others are cheating — it’s because the U.S. will be consuming more of foreign goods,” he said.

One way for the United States to address its trade deficit, he said, is to negotiate the removal of other countries’ barriers to its exports.

“But In terms of measuring how you perform,” he said, “based only on manufacturing seems an overly narrow view of what the U.S. should be doing.”

For example, the United States is “one of the largest if not the largest service exporters” in the world, Rajan said.

“So you cannot look at narrow measures and argue that this is how we should be measuring our performance,” he said.

— CNBC’s Bernie Lo and Akiko Fujita contributed reporting.

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