Brazil-US trade to reach largest deficit since 1997 amid record-breaking trade flow

The trade flow (exports + imports) between Brazil and the United States will exceed, for the first time since 1997, the figure of USD 80 billion. The year 2022 should also close with the largest trade deficit to Brazil ever regarding trade with the North American economic powerhouse.

From January to September, the trade flow between the two countries stood at a US surplus of US$ 11.477 billion, well above the US$ 8.240 billion registered last year. The data are included in the Brazil-United States Trade Monitor, released last week by Amcham Brasil.

According to the document, the first nine months of 2022 resulted in US$ 67.3 billion in exchanges of goods between Brazil and the US, a record value for the period and an increase of 36%, or US$ 17.6 billion, compared to the same period of the previous year.

This year, imports of American products continue to grow at a strong pace, higher than exports (44.1% against 26%). Brazilian imports from the US hit a record high of US$ 39.4 billion in absolute terms, but despite remaining at a very high level, growth has slowed down slightly compared to data from the first half of this year.

See below the track record of Brazilian exports to the US in comparison with imports from the trading partner in the north between January 2019 and August 2022.  The data is from DataLiner

Brazil-USA Trade | Jan 2019 – August 2022 | TEUs

Source: DataLiner (click here to request a demo)

According to the Amcham Brazil Monitor, the significant increase in imports of four energy-related products—fuel oils, natural gas, crude oil, and mineral coal— is responsible for the substantial rise in imports at a 73% rate. These products made up 42.6% of Brazil’s total imports from the United States, accounting for 16.7% of the country’s total imports. In addition, significant increases were noted for agribusiness-related goods like fertilizers, insecticides, fungicides, and herbicides.

The imbalance between exports and imports is due to the strong rise in US sales and the slower growth rate of Brazilian exports to the US market. From January to September, they totaled US$ 27.9 billion, an increase of 26% compared to a 42.6% increase in US exports in the period.

Despite such imbalance, the Amcham Brasil Monitor emphasizes that although the rise in Brazilian exports is less intense than that of imports, it occurs at a wide range, with emphasis on crude oil, pig iron, coffee, wood, and engineering equipment.

The evolution of Brazilian-American trade shows that the value of bilateral trade in the first nine months of 2022 (US$ 67.3 billion) represents 95.4% of the total for 2021 and should end the year much above the US $70.5 billion achieved last year.

While exports correspond to 89.6% of the total value of 2021 (US$ 27.9% over USD 32.1 billion), the year-to-date imports have already equaled the total recorded in the entire year of 2021, with US$ 39.4 billion.

The context of a faster growth rate in imports than exports deepened the deficit of the Brazilian bilateral trade balance, which, in the first nine months of 2021, was US$ 11.447 billion, compared to a deficit of US$ 8.240 billion recorded last year as a whole.

Source: Comex do Brasil

To read the full original article, please go to: https://www.comexdobrasil.com/comercio-brasil-eua-tera-em-2022-recorde-historico-do-intercambio-e-maior-deficit-brasileiro-da-serie-iniciada-em-1997/

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