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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Adidas, Nike or Jordans - could collectable trainers make you rich?
The right pair of trainers can fetch six figures. Here's how you can start collecting vintage Adidas, Nike or Jordans now
By Chris Carter Published
-
Early bird ISA investors flock to global funds, India and the US
There’s been an increase in investors maxing out their ISA at the start of the new tax year. But where are they putting their cash and why does it make sense to be an early bird investor?
By Vaishali Varu Published