Trade Deficit With The US Can Shield Brazil out of Trump’s Tariffs
Brazil’s trade deficit with the United States should contribute to being out of focus, regarding the tariff increase promised by the elected president of the United States, Donald Trump. The statement was made on Monday by the Ministry of Development, Industry, Trade and Services’s secretary Tatiana Prazeres. According to her, the Brazilian government intends to work to maintain and deepen economic ties with the largest economy on the planet.
In 2024, Brazil recorded a small trade deficit of US$ 253 million with the United States. The country exported US$ 40.330 billion and imported US$ 40.583 billion in the period. The data indicates the United States is the second largest trading partner with Brazil, in addition to being the second largest destination for Brazilian goods and the third largest source of imports.
According to the American government itself, Brazil is responsible for the sixth largest trade surplus in the United States, adding goods and services. Tatiana pointed out that the surplus or trade deficit seems to be a relevant issue for the next US administration and said that the fact that the United States accumulates surplus with Brazil is a point that should be taken into account.
Discussions under the Brazil-United States Trade Dialogue, a direct channel between ministries, the United States Department of Commerce (DOC) and the International Trade Administration (ITA), are also seen as fundamental to strengthen trade relations between the two countries. The most recent meeting on the topic took place in September last year.
Another factor that should favor the economic ties between Brazil and the United States are the close relations between companies of both countries. According to Tatiana, the significant intercompany flow should ensure not only the maintenance of the commercial relationship, but also its prioritization.
Last year, Brazil recorded record exports to about 50 countries, including the United States, Spain, Canada, the United Arab Emirates and Indonesia. There was a significant increase in sales of cars, aircraft, compressors and air pumps, beef and pork, iron ore, cellulose and fruit juices.
On the other hand, exports to China fell 9.3% in 2024, impacted by the fall in the international price of commodities and the economic slowdown of the Asian country, which continues to be Brazil’s largest trading partner. In December, the value exported to China fell 40.2% compared to the same month of 2023.
As for imports, which grew 9% last year, the surplus of the Brazilian trade balance fell to US$ 74.552 billion in 2024. The increase in imports focused on capital goods, such as machinery and equipment used in production. According to Tatiana, these imports, which reached the highest level in ten years, indicate productive investments in the country.
In the year, imports of capital goods rose 20.6% in values, with a 25.6% increase in the volume acquired and a 4.7% drop in average prices. Imports of consumer goods increased by 23.4%, driven by a 19.1% growth in volume and a 1.3% reduction in average prices. Purchases of intermediate goods rose 7%, with a 15.9% increase in volume and a 9.3% drop in prices.
source: Gazeta