Imports surge, widening Brazil’s industrial trade deficit

Brazil’s manufacturing industry managed to expand exports by 3.8% in 2025, even amid U.S. tariff hikes. Imports of industrial goods, however, rose at more than twice that pace, up 8.6%. The result was a widening trade deficit in manufacturing to $71.1 billion in 2025, the deepest negative balance since official records began in 1997. The shortfall contrasts with Brazil’s overall trade balance, which posted a surplus of $68.3 billion last year.

On the maritime front, Brazil handled 3,521,432 TEUs of containerized cargo, up 4.4%, outpacing export growth.

See below a month-by-month comparison of Brazilian container imports over the past four years. The chart was prepared using DataLiner data:

Brazilian Container Imports | Jan 2022 – Dec 2025 | TEUs

Source: DataLiner (click here to request a demo)

Extraordinary imports of oil platforms generated a $5.3 billion deficit in 2025, contributing to the deterioration in the manufacturing balance. Even excluding the impact of platform imports across the historical series, however, the sector’s 2025 trade deficit remains the largest on record, though more comparable to the troughs of 2013 and 2014, when deficits reached $64.8 billion and $63.6 billion, respectively. The data come from the Institute for Industrial Development Studies (IEDI).

According to Rafael Cagnin, chief economist at IEDI, the 2025 result was heavily influenced by a widening trade gap in high-technology industries and by reduced support from medium-low technology sectors, typically the main source of trade surpluses within manufacturing.

In high technology, the trade deficit deepened to $50.6 billion in 2025, compared with $45.8 billion in 2024 and $27.1 billion in 2019. The category includes aircraft and pharmaceuticals—two industries that, for different reasons, were strongly affected by the COVID-19 pandemic.

The aircraft industry generated trade surpluses for manufacturing uninterruptedly from 1999 to 2018, covering most of the historical series. Since 2019, however, it has recorded growing deficits. The pharmaceuticals segment, historically in deficit, also saw its negative balance widen further in 2025.

In both sectors, rising imports have driven the deterioration in recent years. Aircraft imports reached $15.3 billion in 2025, up from $12.4 billion in 2024 and $6.4 billion in 2019.

After a sharp drop in 2020, Brazilian aircraft exports have gradually recovered, but at a much slower pace than imports, Cagnin noted. In 2025, aircraft exports totaled $5.5 billion, close to the $5.8 billion recorded in 2019. The outcome was a $9.9 billion trade deficit in 2025, compared with $604 million in 2019.

“The aircraft sector is under intense pressure to decarbonize, with a timeline for the adoption of sustainable aviation fuel, which imposes both financial and technological burdens,” Cagnin said, referring to SAF. Brazil’s Fuel of the Future program, established under Law 14,993 of 2024, sets out the country’s energy transition schedule, including the introduction of SAF for domestic flights starting in 2027.

Cagnin said Embraer currently produces larger aircraft that compete with foreign manufacturers. “There are signs of a positive interaction developing between national aviation, the need for connectivity across Brazil’s continental scale, and our industrial capabilities in aircraft production. The signals are positive, but we still import a lot.” He argued that the public sector has room to foster closer ties between airlines and domestic aircraft manufacturing.

The pharmaceutical industry, also pressured by imports, saw its trade deficit more than double in recent years. The sector posted a $15 billion deficit in 2025, compared with $7 billion in 2019. Imports reached $16.4 billion last year, double the $8.2 billion recorded in 2019.

The pandemic created significant pressure on the sector, which, in the recovery phase, began attracting large innovation projects, Cagnin said. “All industrial policies worldwide now include pharmaceuticals as a strategic sector—not only as a response to the pandemic, but also because China and India have become highly concentrated producers of key inputs.”

He said the sector has undergone significant changes since the pandemic, partly linked to vaccines but extending beyond them. “The technological cycle has advanced globally, and we have fallen further behind. We need to accelerate innovation facilitation processes, which involve not only financing. The bigger challenge today is regulatory and policy coordination to minimize technological risks.”

Securing demand is essential to encourage research, he said. In pharmaceuticals, Brazil’s public health system (SUS) is a major source of demand. “Public policies in this area have been revived, but it takes time. The sector’s deficit reflects our technological lag relative to the rest of the world.” Strong imports of so-called “weight-loss pens” illustrate this trend.

In medium-high technology, the trade deficit reached $82.4 billion in 2025, driven mainly by chemicals and machinery and equipment. Domestic production in machinery was affected by high interest rates, Cagnin said. “There is a context of weak investment and strong competition from a player that has been gaining ground: China.”

The two remaining technological intensity groups identified by IEDI posted trade surpluses. Despite $5.3 billion in oil platform imports in 2025, the medium-technology segment ended the year with a $2.4 billion surplus.

Medium-low technology maintained its typical role as the largest surplus generator, posting a $59.5 billion surplus in 2025, though below the $61.2 billion recorded in 2024. The main positive contribution in this group came from food, beverages, and tobacco, which posted a $60 billion surplus last year, similar to 2024’s $59.5 billion. The surplus narrowed because exports in the medium-low segment fell 1% in 2025, while imports rose 1.7%. “It was the only technological group with declining exports last year. That shows food exports are struggling to advance further,” Cagnin said.

In his view, although U.S. tariff measures affected some sectors significantly, they did not materially impact manufacturing exports overall, which still grew in 2025. He sees the tariff hike as another factor contributing to the disruption of global trade and the reshaping of geopolitics and global value chains.

Source: Valor International

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