Legal Definitions - trade surplus

Definition: A trade surplus occurs when a country exports more goods and services than it imports during a specific period.

Example: Let's say Country A exports $100 billion worth of goods and services to Country B, but only imports $80 billion worth of goods and services from Country B. This means that Country A has a trade surplus of $20 billion.

Explanation: A trade surplus is a positive balance of trade, which means that a country is earning more money from its exports than it is spending on its imports. This can be beneficial for a country's economy, as it can lead to increased employment, higher wages, and economic growth. However, a trade surplus can also lead to currency appreciation, which can make a country's exports more expensive and less competitive in the global market.