# Trade Deficit

*Macro & Economy — Finicade finance glossary*

A trade deficit means a country imports more goods and services than it exports. It is an accounting identity, not a verdict: a deficit on trade must be matched by a surplus on the capital account, meaning foreigners are investing the difference back. That's why persistent US deficits coexist with the dollar's reserve status — the world wants dollar assets, and acquiring them requires selling more goods than it buys.

**Also known as:** trade balance, trade surplus, net exports

**Related terms:** [Current Account](https://finicade.com/glossary/current-account), [Balance of Payments](https://finicade.com/glossary/balance-of-payments), [Exchange Rate](https://finicade.com/glossary/exchange-rate), [Tariff](https://finicade.com/glossary/tariff), [Comparative Advantage](https://finicade.com/glossary/comparative-advantage)

Source: https://finicade.com/glossary/trade-deficit