Trade surplus

When a country's exports exceed its imports, it is said to have a positive balance of trade, or trade surplus.

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.

Most Popular

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks
European stockmarkets

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks

Ray Dalio’s Bridgewater hedge fund is putting its money on a collapse in European stocks. It’s likely to pay off, says Matthew Lynn.
3 Jul 2022
UK house prices are definitely cooling off – but are they heading for a fall?
House prices

UK house prices are definitely cooling off – but are they heading for a fall?

UK house prices hit a fresh high in June, but as interest rates start to rise, the market is cooling John Stepek assesses just how much of an effect h…
30 Jun 2022
How to invest in copper, the most important metal in the world
Industrial metals

How to invest in copper, the most important metal in the world

As the world looks to electrify and try to move away from fossil fuels, copper looks set to be the biggest beneficiary. But how can you invest? Rupert…
30 Jun 2022