Balance of Trade (BOT) definition

  • The Balance of Trade or International Trade Balance is measured by subtracting the number of imports from the number of exports. A trade surplus occurs when the country exports more than it imports, whereas, the reverse scenario is known as a trade deficit. In a weak economy, a trade surplus can be advantageous, as it creates jobs, although in a strong economy, a trade deficit, can lead to more competitive pricing and lowered inflation. The BOT has a strong impact on the GDP, currency values, inflation and employment. The U.S. Department of Commerce publishes monthly and quarterly results.