Trade Deficit

What is Trade Deficit?


1.

the amount of goods and services that a country imports, minus the goods and services that it exports *in a calendar year*. In 1999 Japan exported much more than it imported, so it had a trade surplus. The same year, the United States imported more than it exported, and therefore had a large trade deficit.

While Japan had a trade surplus and the USA had a trade deficit, both had something called a trade balance, which was negative for the USA and positive for Japan.

During economic downturns, political leaders become very concerned if their country is running a trade deficit, because it means that jobs are being lost to business overseas.

See external deficit, trade balance, trade surplus, balance of payments, capital accounts


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