A trade deficit is the amount by which a country's imports cost more than its exports. It is one method of measuring international trade and is also known as a negative trade balance. A country's trade deficit can be calculated by subtracting the total value of its exports from the total value of its imports.

A trade deficit occurs when a country imports more goods and services than it exports, resulting in a negative balance of trade. In essence, it reflects an imbalance in international trade where a nation spends more on foreign products than it earns from its exports. The deficit is calculated by subtracting the value of a country's exports from its imports.

While a trade deficit may raise concerns, it is essential to analyze the broader economic context. A deficit can result from various factors, including strong domestic economic growth, increased consumer spending, and a robust currency that makes imports more attractive. Some argue that trade deficits can be sustainable, serving as a sign of a growing economy that attracts foreign capital.

However, persistent and large trade deficits may lead to the accumulation of foreign debt and impact a country's competitiveness. Policymakers often implement measures to address trade imbalances, emphasizing the importance of a balanced and sustainable approach to international trade for long-term economic health.