Diversification Marks Brazilian Exports to the United States

Although Brazil has run a trade deficit with the United States for the past 15 years, trade between the two countries remains vital. The fact that the U.S. lost its spot as Brazil’s top trading partner to China in 2009 does not change a fundamental truth: while the Asian giant mostly buys commodities, the world’s largest economy absorbs technology-intensive and manufactured goods, making them indispensable to Brazil’s industrial sector.

According to the American Chamber of Commerce for Brazil (Amcham), the U.S. import mix is highly diversified—unlike Brazil’s trade with other markets. Fifty-one industrial products, ranging from aircraft and machinery to chemicals, account for 70% of Brazil’s exports to the U.S. Only 22 products make up the same share for the European Union. For China, just three—all commodities (soybeans, oil, and iron ore)—make up the same share.

“The Brazil-U.S. trade balance used to be much more focused on manufactured goods,” says José Augusto de Castro, Executive President of the Brazilian Foreign Trade Association (AEB). In the 1990s, exports were mostly industrial items such as auto parts. Today, commodities play a larger role, with oil now occupying 14% of total Brazilian exports to the U.S.

Trade relations are also on the rise. In 2024, Brazilian exports to the U.S. hit a record USD 40.3 billion. “Total trade (imports + exports) reached USD 81 billion, an 8.2% increase over the previous year. The U.S. accounts for 15.5% of Brazil’s imports and **12% of its exports,” notes Carla Beni, economist and professor at the Fundação Getulio Vargas (FGV).

She acknowledges that some Brazilian exports, such as steel, may be affected by the new tariffs announced by Donald Trump’s administration. However, she points out that Brazil exports steel to 100 countries, so alternatives exist despite the significance of the U.S. market. For any product, she explains, it comes down to how importers respond.

If buyers are able to pass on the full cost of tariffs to consumers—absorbing smaller margins—the impact will be limited. However, if they reduce orders, Brazilian exporters must find new markets or boost domestic sales. This could be problematic for certain items, like honey, where the U.S. is a key destination.

In this complex scenario, it’s still too early to make conclusive assessments—especially since U.S. negotiations with various countries are happening behind the scenes and could change the current outlook announced on April 2. Moreover, the effects may unfold gradually due to existing contracts and the slow pace of identifying new trade partners, suppliers, or customers.

See below the main products exported by Brazil to the United States in the first quarter of 2025. The chart was created using DataLiner data:

Top Products Exported to the United States | Jan 2022 – Mar 2025 | TEUs

Source: DataLiner (click here to request a demo)

This year’s trade figures are atypical and should not be considered a trend. Still, the data is positive. In April, Brazil’s exports to the U.S. totaled USD 3.57 billion, a 21.9% increase over April 2024, according to Brazil’s Ministry of Development, Industry, Trade and Services (MDIC). Imports rose to USD 3.79 billion, up 14% from the same month in 2024.

On the other hand, steel exports (semi-finished products, ingots, and other primary forms of iron or steel)—now subject to a 25% tariff since March—fell 23.2% in April, while aluminum exports dropped by 73% compared to April 2024. During the first four months of 2025, Brazilian exports to the U.S. rose 3.7%, and imports climbed 14.6%.

As Beni explains, these figures are still distorted. “China rushed to buy Brazilian soybeans in advance to secure supply for several months. That led to wave after wave of shipments,” she notes. Likewise, the U.S. accelerated imports ahead of the new tariffs, skewing the data.

What about pricing? “For manufactured products, prices are set by the exporter. For commodities, they are defined by the market or the importer,” says Castro. He argues That Brazil’s manufactured exports are likely to be the most affected.

Castro also points out that exceptions will apply. Many manufactured goods exported from Brazil to the U.S. are part of intra-company operations between parent firms and subsidiaries. “These may receive preferential treatment, and pricing is likely to be lower than it would be in sales to unrelated companies,” he says.

Beni adds that other Brazilian products may benefit. For instance, roasted coffee—which represented 4.7% of exports in 2024—is relatively easy to redirect to new buyers. And U.S. consumers are unlikely to tolerate steep price increases, making it a disadvantage for American importers.

“We can expect U.S.-China trade flows to slow down. That creates opportunities for Brazil,” says Nelson Ferreira, senior partner at McKinsey & Company. For example, Brazilian soybeans are fetching record premiums over Chicago prices. He believes Brazil can replace U.S. exports to China and Chinese exports to the U.S. In the U.S. market, furniture, clothing, footwear, and some electronics are areas of opportunity. Still, Brazil will face natural competition from Mexico, Central America, and Southeast Asia.

The core structure of Brazilian trade with the U.S. is unlikely to change drastically. On the other hand, if Brazil retaliates with tariffs, this could harm its industry, as capital goods such as machinery and equipment would become more expensive—along with pharmaceutical and veterinary products. Beni believes retaliation is unlikely.

She uses coal as an example, Brazil’s seventh most imported product (3.5%). “We buy coal from the U.S. to produce the steel we then export to them. We do this because Brazilian coal is of lower quality and has low combustion,” she explains. So, if Brazil’s steel output drops, U.S. coal exporters could pressure the Trump administration. As Beni points out, energy sectors, including oil and gas, are strong supporters of the U.S. president.

Source: Valor Econômico

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