Trade surplus definition

A trade surplus occurs when a country’s exports are higher than its imports.

Trade Surplus Formula

The trade surplus reflects an economy that is a net creditor to the rest of the world. The economy with a trade surplus is producing more resources that it is consuming. These resources are provided to other economies in the form of exports. In exchange, the economy receives assets of the country which receives the exports.

The trade balance is one of the components of the current account balance. A trade surplus, moreover, can be counterbalanced by the country’s net income from abroad or net current transfers.

Japan and China are the largest net creditors in the world.