Trade Deficit

Definition

A trade deficit occurs when a country imports more goods and services than it exports, resulting in a negative balance of trade. In simpler terms, it means that a country is buying more from other countries than it is selling to them.

Related terms

Trade Surplus: A trade surplus is the opposite of a trade deficit. It occurs when a country exports more goods and services than it imports, resulting in a positive balance of trade.

Current Account: The current account is part of the balance of payments and includes the balance of trade (exports minus imports), as well as income from investments and transfers.

Protectionism: Protectionism refers to government policies that restrict or regulate international trade in order to protect domestic industries from foreign competition.