Argentina - Brazil Trade 2023 Q2: Lopsided Deficit Deepens

Key Market Takeaways: Argentina - Brazil Trade

The bilateral trade relationship between Argentina and Brazil remains heavily skewed toward imports, with Argentina's exports failing to offset demand in Q2 2023.

• Economic Pulse: Argentina posted a $2.63B trade deficit with Brazil, driven by $5.62B in imports (+14.98% YoY in June) versus $2.99B in exports (-25.87% YoY).
• Exchange Structure: Argentina-Brazil trade statistics reveal deep automotive supply chain integration (HS 87 dominates both sides, 38.59% of exports, 22.43% of imports), with Brazil holding broader commodity diversification.
• Strategic Interdependence: Mercosur-driven intra-industry trade in vehicles underscores tight regional production networks, but Argentina’s lopsided export concentration risks exposure to sectoral downturns.

This bilateral trade snapshot is based on verified customs data from the yTrade database.

Argentina-Brazil Trade Trend in Q2 2023

Argentina Export Performance: Shipments to Brazil

• Total Volume: $2.99B in Q2 2023.
• Growth Trend & Context:
  • YoY decline persisted across all months, worsening to -25.87% in June.
  • No specific trade news or policy shifts were reported to explain the contraction.
• Key Volatility: Steady MoM declines (-8.64% in May, -8.51% in June), with no recovery signals.

Argentina Import Performance: Sourcing from Brazil

• Total Volume: $5.62B in Q2 2023.
• Growth Trend & Context:
  • Strong YoY growth (peaking at +30.51% in May), though momentum slowed to +14.98% by June.
• Key Volatility: May saw the highest MoM jump (+21.44%), but growth tapered in June (+4.63%).

Argentina - Brazil Trade Balance & Market Dynamics

• Net Position: Trade deficit of $2.63B (Imports exceeded exports).
• Relationship Status: Argentina remains heavily dependent on Brazilian imports, with exports failing to offset demand.

Argentina Import Trend from Brazil 2023 Q2 (Source: yTrade)**

Argentina Export Trend to Brazil 2023 Q2 (Source: yTrade)**

Get Historical Argentina Brazil Trade Records

Argentina-Brazil Top Trading Products in Q2 2023

Argentina Export Profile: What Does Argentina Sell to Brazil

• Top Commodity: Vehicles (HS 87) dominate exports, accounting for 38.59% of total shipments to Brazil.
• Demand Driver: Brazil's automotive sector relies on Argentine vehicle imports, likely due to integrated regional supply chains or tariff advantages under Mercosur.
• Concentration: High—HS 87 alone holds >38% share, indicating a lopsided export structure.

Argentina Import Profile: What Does Argentina Buy from Brazil

• Top Commodity: Vehicles (HS 87) also lead imports, making up 22.43% of purchases from Brazil.
• Dependency Nature: Reciprocal trade in vehicles suggests intra-industry trade, with both nations exchanging similar goods—possibly due to specialization within auto manufacturing.

Argentina - Brazil Trade Relationship Dynamics

• The Exchange Model: Deep Supply Chain Integration in the automotive sector (HS 87 dominates both sides). This reflects Mercosur-driven production networks.
• Value Chain Position: Symmetrical trade in vehicles (similar HS codes) implies neither holds a clear high-value edge. Brazil’s larger export share of agricultural goods (HS 12, 26) hints at broader commodity diversification.

Import Analysis by Product: Brazil to Argentina (Source: yTrade)

Export Analysis by Product: Argentina to Brazil (Source: yTrade)

Check Detailed Argentina-Brazil Trade HS Code Breakdown

Future Outlook & Strategic Recommendations

Forecast

Argentina’s trade deficit with Brazil is likely to persist in Q3 2023, driven by weakening exports and sustained import demand. The automotive sector’s intra-industry trade will remain dominant, but Argentina’s export decline (-25.87% YoY in June) signals eroding competitiveness, possibly due to cost pressures or shifting supply chain dynamics. Without policy intervention or a rebound in Brazilian demand, Argentina’s trade imbalance could widen further. Traders should prepare for continued volatility, particularly in vehicle shipments, which account for over 38% of exports.

Strategic Moves

• Diversify Export Markets: Reduce reliance on Brazil by targeting other Mercosur members or non-regional partners for vehicle exports, mitigating concentration risk.
• Optimize Supply Chains: Argentine automakers should renegotiate input costs with Brazilian suppliers or explore local sourcing to curb import dependency and improve margins.
• Lobby for Trade Incentives: Exporters must push for targeted subsidies or tax breaks to revive competitiveness in key sectors like automotive, countering Brazil’s pricing edge.

Frequently Asked Questions

How did Argentina - Brazil trade perform in 2023 Q2?

Argentina's exports to Brazil declined by 25.87% YoY to $2.99B, while imports grew by 14.98% YoY to $5.62B, resulting in a trade deficit of $2.63B.

What are the top exports from Argentina to Brazil?

Vehicles (HS 87) dominate Argentina's exports to Brazil, accounting for 38.59% of total shipments.

What does Argentina import from Brazil?

Vehicles (HS 87) are also the top import, making up 22.43% of Argentina's purchases from Brazil, alongside agricultural goods (HS 12, 26).

What is the trade balance between Argentina and Brazil?

Argentina recorded a trade deficit of $2.63B with Brazil in Q2 2023, as imports significantly exceeded exports.