Trade
Trade Deficit
Definition
When a country imports more goods and services than it exports, resulting in a negative trade balance.
Explanation
The United States has run the world's largest trade deficit for decades (~$800B annually), importing far more consumer goods, oil, and manufactured products than it exports. A trade deficit is not necessarily bad — it can reflect strong domestic demand and consumer purchasing power. However, persistent deficits funded by borrowing can be unsustainable. Germany, China, and Japan typically run surpluses.