What is a 'Trade Deficit'?

A trade deficit occurs when a country's imports exceed its exports. It is an economic measure used in the field of international trade. The trade deficit shows the outflow of domestic currency to foreign markets. A trade deficit is not necessarily detrimental, because it often corrects itself over time. However, a trade deficit may lead to fewer jobs. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Trade Deficit A trade deficit is an economic measure of international trade in which a country's imports exceed its exports. A trade deficit represents an outflow of domestic currency to foreign markets. It is also referred to as a negative balance of trade (BOT). Read More » Related to "Trade Deficit" Current Account Deficit vs. Trade Deficit: What's the Difference? The terms current account deficit and trade deficit are often used interchangeably, but they have substantially different meanings. Read More » Trade Deficit: Advantages and Disadvantages Is a trade deficit, also known as a current account deficit, beneficial or detrimental to a country's economy? What some economists see as drawbacks others view as benefits. Read More » The Basics of Tariffs And Trade Barriers Everything you need to know about trade barriers and tariffs, why they are used and their effects on the local economy. Read More » Related Definitions Import Definition An import is a good or service brought into one country from another and, along with exports, are components of international trade. In conjunction with exports, imports form the backbone of international commerce. Import issues continue to be debated by economists, analyst, and politicians. Read More » Export Definition The definition of export is goods produced in one country and shipped to another country for future sale or trade, adding to the producing nation's gross output. Read More » Balance Of Trade - BOT The balance of trade is the difference between a country's import and export payments and is the largest component of a country's balance of payments. Read More » Trade Surplus A trade surplus is an economic measure of a positive balance of trade, where a country's exports exceed its imports. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy