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What is the balance of trade?

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Quick answer

The balance of trade is the difference between the value of a country's exports and its imports. A surplus means it sells more than it buys abroad; a deficit means the opposite. It's a key measure of a nation's economic exchange with the world.

Key things to understand

  1. It compares the value of exports versus imports.
  2. Exports > imports = a trade surplus.
  3. Imports > exports = a trade deficit.
  4. It's a major part of a country's overall economy.

People also ask

What is the balance of trade?
The difference between the value of a country's exports and imports of goods and services.
What's the difference between a trade surplus and deficit?
A surplus means a country exports more than it imports; a deficit means it imports more than it exports.
Is a trade deficit bad?
Not necessarily — it can reflect strong demand or investment, though large, persistent ones can raise concerns.