Brazil-US bilateral deficit grows to all-time high: USD 8.9bn from January to July

Brazil accumulated the largest deficit in its trade history with the United States in the first seven months of 2022. It was also the worst result ever obtained by Brazil with any of its trading partners in just seven months. From January to July, US exports to Brazil totaled US$ 29.872 billion, up 52.6% from the same period last year. On the other hand, Brazilian sales to the American market totaled US$ 20.932 billion, an increase of 27.8% over the same period in 2022.

Hence, the trade flow was unfavorable to Brazil by US$ 8.938 billion. Last year, the positive balance in favor of the US was US$ 8.240 billion. The data are from the Foreign Trade Secretariat (Secex) of the Ministry of Economy.

See below the track record, measured in TEUs, of the exports and imports between Brazil and the US from January 2019 to June 2022. The data below is from DataLiner.

Brazil-USA Bilateral Trade | Jan 2019 – Jun 2022 | TEUs

Source: DataLiner (click here to request a demo)

The deficit in the bilateral trade between Brazil and the US was primarily due to the strong growth in imports of products such as fuel oils, natural gas, and petroleum, which between January and July were among the five most imported items by Brazil from the American market.

Purchases of fuel oils reached US$ 7.3 billion, a 108 percent growth, and led the import list. Along the same lines, natural gas imports grew 131% to US$ 2.5 billion. Oil imports increased to US$ 1.99 billion, mainly because of a 265% surge in Brazilian purchases. Non-electric motors and machines accounted for US$ 2.4 billion in imports, while other items from the manufacturing industry accounted for US$ 1.19 billion in imports.

While US exports soared by 52.6%, Brazilian sales grew by 27.8%. The main products shipped to the US market were semi-finished products, ingots (US$ 2.9 billion, up 6.9%), oil (US$ 2.7 billion, up 90.5%), roasted coffee (up US$ 69.9% to US$ 1.0063 billion), pig iron (US$ 1.0026 billion, an increase of 64.6%) and aircraft, whose exports grew 27.6% and totaled US$ 933 million in the January-July period.

All-time high deficit

The bilateral trade deficit between Brazil and the US of almost US$ 9 billion in just seven months marks a historical record in trade between the two countries. In the first year on record, which began to be kept in 1997, Brazilian exports totaled US$ 9.629 billion, and US sales reached US$ 13.662 billion. That year, the exchange generated a negative balance of US$ 4.039 billion.

In the year 2000, Brazil reached the first bilateral trade surplus with the United States: US$ 265 million, resulting from exports of US$ 13.161 billion and imports in the amount of US$ 12.906 billion. Brazilian surpluses continued until 2008, and the largest Brazilian balance was recorded in 2005 when exports exceeded imports by US$ 10.023 billion.

However, the trade balance switched back to the American side in 2009, with a US$ 4.430 billion surplus. In 2013, the United States saw the biggest bilateral trade balance, US$ 12.376 billion.

In the following years, the trend of American surpluses was only broken in 2017 when Brazil reached a balance of US$ 2.026 billion in exchanges with the Americans. As of 2018, the US again enjoyed a favorable trade balance over Brazil, a trend that became more accentuated when the US surplus totaled US$ 8.240 billion, a figure toppled in the first seven months of 2022 when the year-to-date balance totaled  US$ 8.939 billion.

Source: Comex do Brasil

To read the full original article, please go to: https://www.comexdobrasil.com/brasil-registra-deficit-recorde-da-serie-historica-no-comercio-bilateral-com-os-eua-us-89-bilhoes-de-janeiro-a-julho/

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