A trade surplus is when a country exports more than it imports, while a trade deficit occurs when imports exceed exports. In simpler terms, a trade surplus means that a country is selling more goods and services to other countries than it is buying from them. This can be seen as a positive economic indicator, as it can lead to increased national income and job creation.
On the other hand, a trade deficit suggests that a country is spending more on foreign trade than it is earning. This can sometimes indicate an economy that is consuming more than it produces. While a trade deficit is not necessarily a bad thing, as it can allow consumers to access a wider variety of goods, it may raise concerns about economic sustainability in the long run.