how do we measure balance of trade 
the balance of trade is typically measured as the difference between a country s exports and imports of goods to calculate the balance of trade you would subtract the value of a country s imports from the value of its exports if the result is positive it means that the country has a trade surplus and if the result is negative it means that the country has a trade deficit the bottom linethe balance of trade is the difference between a country s exports and imports of goods a numerically positive balance of trade also known as a trade surplus occurs when a country exports more goods than it imports this means that the country is earning more from its exports than it is spending on its imports and it is generally seen as a sign of economic strength although it s not an indicator of economic health on its own on the other hand a numerically negative balance of trade also known as a trade deficit occurs when a country imports more goods than it exports this means that the country is spending more on imports than it is earning from exports and it can be a cause for concern if it persists over a long period of time however it s not always a problem and many successful economies have run trade deficits for decades the balance of trade is an important component of a country s balance of payments which is a record of all its international financial transactions correction feb 8 2023 a previous version of this article incorrectly defined a positive balance of trade and a negative balance of payments it has been edited to reflect that a positive balance of trade and negative balance of payments occurs when a country is exporting more goods than it is importing 