Net Exports

Written By
Paul Tracy
Updated November 4, 2020

What are Net Exports?

Net exports are the difference between a country's total value of exports and total value of imports. Depending on whether a country imports more goods or exports more goods, net exports can be a positive or negative value.

How Do Net Exports Work?

Net exports are measured by comparing the value of the goods imported over a specific time period to the value of similar goods exported during that period. The formula for net exports is:

Net Exports = Value of Exports - Value of Imports

For example, let's suppose Canada purchased $3 billion of gasoline from other countries last year, but it also sold $7 billion of gasoline to other countries last year. Using the formula above, Canada's net gasoline exports are:

Net Exports = $7 billion - $3 billion = $4 billion

Why Do Net Exports Matter?

Net exports is an important variable used in the calculation of a country's GDP. When the value of goods exported is higher than the value of goods imported, the country is said to have a positive balance of trade for the period. When taken as a whole, this in turn can be an indicator of a country's savings rate, future exchange rates, and to some degree its self-sufficiency (though economists constantly debate the idea).

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Net Exports.
Be the first to ask a question

If you have a question about Net Exports, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Net Exports, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Net Exports

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms