Argentina - Brazil Trade 2023 Q4: Trade Deficit Widens

Key Market Takeaways: Argentina - Brazil Trade

The bilateral trade relationship between Argentina and Brazil contracted in Q4 2023, with both exports and imports declining YoY.

• Economic Pulse: Argentina posted a $240M trade deficit with Brazil, as imports ($3.19B) slightly outpaced exports ($2.95B). Volatility marked the quarter, with sharp MoM swings in both directions.
• Exchange Structure: Argentina - Brazil trade statistics reveal intra-industry trade, dominated by vehicles (HS 87) flowing both ways. Brazil supplies critical industrial inputs (machinery, steel), while Argentina leans on agricultural exports alongside autos.
• Strategic Interdependence: Deep supply chain integration, particularly in auto manufacturing, underpins the relationship, though Argentina’s reliance on Brazilian industrial goods remains structural.

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

Argentina-Brazil Trade Trend in Q4 2023

Argentina Export Performance: Shipments to Brazil

• Total Volume: $2.95B in Q4 2023.
• Growth Trend & Context:
  • YoY decline persisted across all months, with November (-23.24%) marking the sharpest drop.
  • December saw a partial recovery (+20.3% MoM), though still down -2.1% YoY.
• Key Volatility: November’s -17.83% MoM contraction was the quarter’s lowest point.

Argentina Import Performance: Sourcing from Brazil

• Total Volume: $3.19B in Q4 2023.
• Growth Trend & Context:
  • Consistent YoY declines, worsening from -1.29% in October to -14.39% in December.
  • MoM drops accelerated, peaking at -16.74% in October.
• Key Volatility: October’s imports ($1.23B) were the quarter’s high, but momentum faded rapidly.

Argentina - Brazil Trade Balance & Market Dynamics

• Net Position: $240M trade deficit (Imports > Exports).
• Relationship Status: Argentina’s import reliance on Brazil narrowed slightly, but structural deficit persists. Both sides saw reduced trade volumes YoY.

Argentina Import Trend from Brazil 2023 Q4 (Source: yTrade)**

Argentina Export Trend to Brazil 2023 Q4 (Source: yTrade)**

Get Historical Argentina Brazil Trade Records

Argentina-Brazil Top Trading Products in Q4 2023

Argentina Export Profile: What Does Argentina Sell to Brazil

• Top Commodity: Vehicles (HS 87) dominate exports, accounting for 36.88% of total shipments to Brazil.
• Demand Driver: Brazil’s consumer market absorbs Argentine vehicles, likely due to regional trade agreements (e.g., Mercosur) and integrated auto supply chains.
• Concentration: The top 3 exports (HS 87, 99, 10) make up 68.7% of total exports, indicating high reliance on a few key categories.

Argentina Import Profile: What Does Argentina Buy from Brazil

• Top Commodity: Vehicles (HS 87) also lead imports, representing 27.2% of Argentina’s purchases from Brazil.
• Dependency Nature: Brazil supplies critical industrial inputs—machinery (HS 84), iron/steel (HS 72), and plastics (HS 39)—highlighting a manufacturing and raw material dependency.

Argentina - Brazil Trade Relationship Dynamics

• The Exchange Model: Intra-Industry Trade defines the relationship, with both countries exchanging vehicles (HS 87) and machinery (HS 84). This suggests deep supply chain integration, possibly in auto manufacturing.
• Value Chain Position: Brazil holds a slight edge in value-add, exporting higher-value machinery (HS 84) and industrial inputs, while Argentina leans on agricultural exports (HS 10, 04) alongside vehicles.

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 Q1 2024, driven by continued YoY declines in both exports and imports. The partial recovery in December exports suggests potential stabilization, but structural reliance on vehicle trade (HS 87) and industrial inputs leaves Argentina vulnerable to supply chain disruptions. With Brazil’s higher value-add exports (machinery, steel) maintaining dominance, Argentina must address its export concentration risk to rebalance the trade relationship. Traders should prepare for volatile demand, particularly in the auto sector, as Mercosur dynamics and regional economic headwinds weigh on bilateral flows.

Strategic Moves

• Diversify Export Markets: Argentina’s overreliance on Brazil for vehicle exports (36.88% of total) demands urgent diversification. Exporters must target new markets in Latin America or Asia to mitigate dependency risks.
• Secure Alternative Suppliers: Given Argentina’s $240M trade deficit, importers should negotiate long-term contracts with non-Brazilian suppliers for critical industrial inputs (HS 84, 72) to reduce cost volatility.
• Optimize Supply Chains: Firms engaged in intra-industry trade (HS 87, 84) must adopt JIT inventory systems and streamline cross-border logistics to counter MoM shipment fluctuations.

Frequently Asked Questions

How did Argentina - Brazil trade perform in 2023 Q4?

Argentina's exports to Brazil totaled $2.95B, while imports reached $3.19B, with both sides showing YoY declines in trade volume.

What are the top exports from Argentina to Brazil?

The top exports are Vehicles (HS 87), accounting for 36.88% of shipments, followed by other key categories (HS 99, 10), making up 68.7% of total exports.

What does Argentina import from Brazil?

Argentina primarily imports Vehicles (HS 87, 27.2%), along with Machinery (HS 84), Iron/Steel (HS 72), and Plastics (HS 39), reflecting industrial and manufacturing dependencies.

What is the trade balance between Argentina and Brazil?

Argentina recorded a $240M trade deficit with Brazil in Q4 2023, with the structural gap persisting despite a slight narrowing in import reliance.