Brazil - United States Trade 2023 Q2: Trade Deficit Widens

Key Market Takeaways: Brazil - United States Trade

The bilateral trade relationship between Brazil and United States weakened in Q2 2023, with both exports and imports contracting year-over-year.

• Economic Pulse: Brazil posted a $1.45B trade deficit with the U.S., as exports ($9.05B) and imports ($10.50B) both declined sharply—highlighting broader bilateral trade softening.
• Exchange Structure: Brazil - United States trade statistics reveal a resource-for-tech dynamic: Brazil supplies iron/steel and fuels (42.7% of exports), while importing U.S. machinery and refined energy products.
• Strategic Interdependence: The partnership remains complementary but imbalanced, with the U.S. capturing higher value-add in manufactured goods.

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

Brazil-United States Trade Trend in Q2 2023

Brazil Export Performance: Shipments to United States

• Total Volume: $9.05B in Q2 2023.
• Growth Trend & Context:
  • YoY decline persisted across all months, with June (-23.26%) marking the sharpest drop. No trade policy shifts were reported to explain the contraction.
  • May’s 20.68% MoM surge was offset by June’s -1.45% dip, indicating unstable demand.

Brazil Import Performance: Sourcing from United States

• Total Volume: $10.50B in Q2 2023.
• Growth Trend & Context:
  • YoY declines deepened, peaking at -32.69% in June. No supply shocks or policy changes were cited.
  • Volatility was stark: May’s 14.47% MoM rise contrasted with June’s -21.16% plunge, suggesting erratic procurement.

Brazil - United States Trade Balance & Market Dynamics

• Net Position: Deficit of $1.45B (Exports $9.05B vs. Imports $10.50B).
• Relationship Status: Brazil remains a net importer from the U.S., with both trade flows contracting YoY—pointing to broader bilateral trade weakening.

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

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

Get Historical Brazil United States Trade Records

Brazil-United States Top Trading Products in Q2 2023

Brazil Export Profile: What Does Brazil Sell to United States

• Top Commodity: Rank #1 export is HS 72 (Iron and Steel), accounting for 21.30% of total exports to the U.S.
• Demand Driver: The U.S. imports these raw materials for industrial processing, likely in construction and manufacturing sectors.
• Concentration: Trade is moderately concentrated, with the top 3 categories (Iron/Steel, Mineral Fuels, Machinery) making up 42.67% of exports.

Brazil Import Profile: What Does Brazil Buy from United States

• Top Commodity: Rank #1 import is HS 27 (Mineral Fuels), representing 25.34% of total imports from the U.S.
• Dependency Nature: Reflects energy security dependency, as Brazil relies on U.S. fuel exports, possibly refined petroleum or coal.

Brazil - United States Trade Relationship Dynamics

• The Exchange Model: Resource-for-Tech Complementarity. Brazil exports raw materials (Iron/Steel, Mineral Fuels) and imports high-value goods (Machinery, Pharmaceuticals, Precision Instruments).
• Value Chain Position: The U.S. holds the higher value-add position, with Brazil primarily supplying low-margin commodities.

Import Analysis by Product: United States to Brazil (Source: yTrade)

Export Analysis by Product: Brazil to United States (Source: yTrade)

Check Detailed Brazil-United States Trade HS Code Breakdown

Future Outlook & Strategic Recommendations

Forecast

The Brazil - United States trade forecast for Q3 2023 remains cautious, with persistent YoY declines likely due to weakening demand and volatile procurement patterns. The sharp contraction in June, particularly in iron/steel and mineral fuels, signals near-term headwinds for Brazil’s export-driven sectors. However, the complementary nature of the trade relationship—Brazil’s raw materials for U.S. high-value goods—could stabilize volumes if energy and industrial demand rebounds. Traders should prepare for continued volatility, with a potential inflection point in late 2023 if global commodity markets recover.

Strategic Moves

• Diversify Export Markets: Brazilian exporters must reduce reliance on U.S. demand by targeting emerging markets in Asia and Europe, especially for iron/steel and agricultural commodities.
• Lock in Fuel Supply Contracts: Given Brazil’s energy dependency on U.S. mineral fuels, importers should negotiate long-term agreements to hedge against price swings and supply disruptions.
• Upgrade Trade Infrastructure: To compete in higher-value U.S. imports (e.g., machinery, pharmaceuticals), Brazilian firms should invest in logistics and compliance systems to streamline cross-border transactions.

Frequently Asked Questions

How did Brazil - United States trade perform in 2023 Q2?

Brazil's exports to the U.S. totaled $9.05B, while imports reached $10.50B, both showing YoY declines. The trade flows were volatile, with sharp drops in June.

What are the top exports from Brazil to United States?

Iron and Steel (HS 72) led Brazil's exports, accounting for 21.30% of total shipments. Other key categories included Mineral Fuels and Machinery.

What does Brazil import from United States?

Mineral Fuels (HS 27) were the top import, making up 25.34% of total purchases. Brazil also imported high-value goods like Machinery and Pharmaceuticals.

What is the trade balance between Brazil and United States?

Brazil recorded a trade deficit of $1.45B with the U.S. in Q2 2023. Both exports and imports contracted YoY, indicating weakening bilateral trade.