Balance of Trade

Ever heard of the “balance of trade” before? Probably so; but did you know what it meant? Perhaps not.

It’s actually quite simple, so long as you understand what two terms mean. The balance of trade is the cash value of exports versus the cash value of imports for a given country. If a country is exporting more goods than it is importing then its’ balance of trade is in a surplus. If the opposite is true then the country has a trade deficit. Generally speaking it’s far more beneficial for a country to be in a surplus than a deficit.

So what’s the US balance of trade? Sadly, it’s a deficit. Since at least the 1970’s the United States has had a trade deficit that has only deepened over the decades. This applies, however, only to the trade of goods; trade of services has been in the plus for ages.