Legal Definitions - trade deficit

A trade deficit occurs when a country imports more goods and services than it exports. In other words, it means that a country is buying more from other countries than it is selling to them.

For example, if the United States imports $500 billion worth of goods and services from China, but only exports $200 billion worth of goods and services to China, then the United States has a trade deficit with China of $300 billion.

This can be a concern for some countries because it means that they are spending more money on imports than they are earning from exports. It can also lead to a decrease in jobs in certain industries as companies may choose to import goods from other countries instead of producing them domestically.