May 252020

When a country’s exports exceed its imports, it is said to have a positive balance of trade, or trade surplus. The balance of trade is simply a country’s exports minus its imports. The opposite of a trade surplus is, therefore, a trade deficit. The balance of trade can be caused by several factors, including exchange rates, trade agreements, or the price of goods manufactured at home. For example, China’s trade surplus with the United States has been increasing mainly because China prevents any substantial increase in the value of its currency. As a result, US imports from China are many times the value of US exports to China.

More on banking and finance terms later this week, when I write my next post. Trade surplus. Please bookmark us and leave a comment.


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