Measuring Global Trade

Nations and businesses that trade back and forth, buy and sell companies, loan one another money, and invest in real estate around the globe need to have a way to evaluate the impact of these transactions on the economy. They need to make decisions about trade policies, regulations, and trade agreements, and until they can get a snapshot of what global trade is doing to hurt or help its economy, they can’t make these decisions.

balance of trade

The difference between the value of a country’s exports and the value of its imports during a specific time is the country’s balance of trade.

Exports are goods and services made in one country and sold to others. Imports are goods and services that are bought from other countries. When a country analyzes its balance of trade, two scenarios can occur:

• Trade Surplus: When a country exports more than it imports, it has a favorable balance of trade, called a trade surplus. This means more money flows into the country than flows out through trade.
• Trade Deficit: When a country imports more than it exports, it has an unfavorable balance of trade, called a trade deficit. This means more money flows out of the country than flows in through trade.

Multiple Trading Partners

It’s important to understand that a country’s overall balance of trade represents the sum of all its trading relationships with other countries. This means a country can simultaneously have:

• A trade surplus with some countries (exporting more to them than importing)
• A trade deficit with others (importing more from them than exporting)
• An overall trade surplus or deficit that reflects the net result of all these relationships

For example, in March 2025, the United States had a trade deficit of $140.5 billion. This overall figure included a trade deficit with China of $24.8 billion while having a trade surplus of $3.2 billion with countries in Central and South America.^[1]

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