{"id":2825,"date":"2023-02-19T16:10:52","date_gmt":"2023-02-19T16:10:52","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-3-1-4-global-trade\/"},"modified":"2025-05-19T20:51:29","modified_gmt":"2025-05-19T20:51:29","slug":"learn-it-3-1-4-global-trade","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-3-1-4-global-trade\/","title":{"raw":"Learn It 3.1.4: Global Trade","rendered":"Learn It 3.1.4: Global Trade"},"content":{"raw":"

Measuring Global Trade<\/h2>\r\n

Nations and businesses that trade back and forth, buy and sell companies, loan\u00a0one\u00a0another 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.<\/p>\r\n

\r\n

balance of trade<\/h3>\r\n

The difference between the value of a country\u2019s exports and the value of its imports during a specific time is the country\u2019s balance of trade<\/strong>.<\/p>\r\n<\/section>\r\n

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

    \r\n\t
  • Trade Surplus<\/strong>: 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.<\/li>\r\n\t
  • Trade Deficit<\/strong>: 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.<\/li>\r\n<\/ul>\r\n

    Multiple Trading Partners<\/h3>\r\n

    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:<\/p>\r\n

      \r\n\t
    • A trade surplus with some countries (exporting more to them than importing)<\/li>\r\n\t
    • A trade deficit with others (importing more from them than exporting)<\/li>\r\n\t
    • An overall trade surplus or deficit that reflects the net result of all these relationships<\/li>\r\n<\/ul>\r\n

      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.[footnote]U.S. Bureau of Economic Analysis (BEA). \u201cU.S. International Trade in Goods and Services, March 2025,\u201d May 6, 2025. https:\/\/www.bea.gov\/news\/2025\/us-international-trade-goods-and-services-march-2025[\/footnote]<\/p>\r\n

      [ohm2_question height=\"300\"]3809[\/ohm2_question]<\/section>","rendered":"

      Measuring Global Trade<\/h2>\n

      Nations and businesses that trade back and forth, buy and sell companies, loan\u00a0one\u00a0another 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.<\/p>\n

      \n

      balance of trade<\/h3>\n

      The difference between the value of a country\u2019s exports and the value of its imports during a specific time is the country\u2019s balance of trade<\/strong>.<\/p>\n<\/section>\n

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

        \n
      • Trade Surplus<\/strong>: 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.<\/li>\n
      • Trade Deficit<\/strong>: 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.<\/li>\n<\/ul>\n

        Multiple Trading Partners<\/h3>\n

        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:<\/p>\n

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

          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]<\/sup><\/a><\/p>\n