Cornhusker Economics

Cornhusker Economics

Trade Balances


The fact that the United States has a global trade deficit as well as bilateral trade deficits with particular countries, such as China or Germany, has recently received extensive commentary in the news (see Irwin 2016, Constable 2017, Goodman 2017). The balance of trade is the difference between the value of a country’s imports of goods and services and the value of its exports and can be either negative (deficit) or positive (surplus). Trade balances between two countries are actually of little economic interest as countries always have trade surpluses with some countries while having trade deficits with others. The overall trade balance will be equal to the summation of these bilateral balances.

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2017 Cornhusker Economics


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