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Trade in goods (also known as visible trade) refers to the import and export of physical, tangible products between a country and the rest of the world.

Key characteristics:

• Involves actual physical items that can be seen and touched
• Includes manufactured goods, raw materials, agricultural products, and machinery
• Measured through customs records at ports of entry and exit
• Often referred to as visible trade because the goods are physically observable

Export of goods:

• Domestic goods sold to foreign buyers
• Recorded as a credit (source of foreign currency) in the balance of payments

Import of goods:

• Foreign goods purchased by domestic buyers
• Recorded as a debit (use of foreign currency) in the balance of payments

Balance of trade in goods:

• Also called the trade balance or merchandise balance
• Calculated as: Exports of goods − Imports of goods
• A surplus occurs when exports exceed imports
• A deficit occurs when imports exceed exports