Balance of Trade
a.k.a. Trade balance
The value of a country's exports minus its imports. Positive is a trade surplus; negative is a trade deficit.
The balance of trade is the simplest scoreboard of a country's trade. Sell more abroad than you buy, and you run a surplus; buy more than you sell, and you run a deficit.
For currencies, a surplus means foreigners need your currency to pay for your goods, which is supportive. A deficit means the opposite. It is only one force among many, though: the US has run deficits for decades while the dollar stayed the world's favourite.
Trade balance in a month
- Exports: $250 billion.
- Imports: $310 billion.
- Trade balance = 250 − 310 = −$60 billion.
Bottom line: A $60 billion trade deficit that month.
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