Mexico - Brazil Trade 2023 Q3: Trade Deficit & Industrial Ties

Key Market Takeaways: Mexico - Brazil Trade

The bilateral trade relationship between Mexico and Brazil shows mixed growth and volatility in Q3 2023, with Mexico running a significant trade deficit.

• Economic Pulse: Mexico posted a $2.47B trade deficit with Brazil ($3.62B imports vs. $1.15B exports), driven by heavy reliance on Brazilian goods despite modest export recovery in August and September.
• Exchange Structure: Bilateral trade data reveals intra-industry trade dominance, with unclassified goods (HS 99) accounting for 38.39% of Mexico’s exports and 54.50% of imports, suggesting deep industrial supply chain integration.
• Strategic Interdependence: The high concentration in specialized goods (HS 99) and machinery (HS 84, 85, 87) points to tight industrial collaboration, though Mexico holds a slightly higher value-add position.

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

Mexico-Brazil Trade Trend in Q3 2023

Mexico Export Performance: Shipments to Brazil

• Total Volume: $1.15B in Q3 2023.
• Growth Trend & Context:
  • YoY growth was mixed, with July down -14.7% but August and September showing modest recovery (+5.1% and +0.08%, respectively).
  • No significant trade news to explain fluctuations.
• Key Volatility: August saw a sharp 34.38% MoM surge, followed by a -4.42% dip in September.

Mexico Import Performance: Sourcing from Brazil

• Total Volume: $3.62B in Q3 2023.
• Growth Trend & Context:
  • YoY growth varied: July surged +36.38%, August dipped -4.53%, and September rebounded +8.59%.
• Key Volatility: July was the peak month (36.38% YoY), while August saw a -9.57% MoM drop.

Mexico - Brazil Trade Balance & Market Dynamics

• Net Position: Mexico ran a trade deficit of $2.47B (Imports $3.62B > Exports $1.15B).
• Relationship Status: Heavy reliance on Brazilian imports, with exports failing to offset the imbalance.

Mexico Import Trend from Brazil 2023 Q3 (Source: yTrade)**

Mexico Export Trend to Brazil 2023 Q3 (Source: yTrade)**

Get Historical Mexico Brazil Trade Records

Mexico-Brazil Top Trading Products in Q3 2023

Mexico Export Profile: What Does Mexico Sell to Brazil

• Top Commodity: HS Code 99 (38.39% share), likely representing unclassified or special category goods.
• Demand Driver: Brazil imports these goods for industrial processing or niche market needs, given the high share of unclassified items.
• Concentration: The top two categories (HS 99 and 87) account for 70.25% of exports, indicating high trade concentration.

Mexico Import Profile: What Does Mexico Buy from Brazil

• Top Commodity: HS Code 99 (54.50% share), also unclassified or special category goods, suggesting a bilateral trade in unique or non-standardized products.
• Dependency Nature: The dominance of unclassified goods implies a strategic trade in specialized items, possibly tied to specific industrial or regulatory agreements.

Mexico - Brazil Trade Relationship Dynamics

• The Exchange Model: Intra-Industry Trade is evident, with both countries exchanging similar unclassified goods (HS 99) and machinery/vehicles (HS 84, 85, 87). This suggests deep supply chain integration, particularly in industrial sectors.
• Value Chain Position: Mexico appears to hold a slightly higher value-add position, given its exports of machinery (HS 84, 85) alongside unclassified goods, while Brazil’s exports are more heavily skewed toward raw or unprocessed categories.

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

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

Check Detailed Mexico-Brazil Trade HS Code Breakdown

Future Outlook & Strategic Recommendations

Forecast

The Mexico-Brazil trade relationship is expected to remain volatile in the near term, with Mexico’s deficit likely to persist due to its heavy reliance on Brazilian imports. The mixed YoY performance in exports—modest recovery in August and September—suggests limited upside unless Mexico diversifies its export basket beyond concentrated HS Code 99 goods. However, the intra-industry trade model (evident in HS 84, 85, and 87 exchanges) indicates potential for deeper supply chain collaboration, which could stabilize trade flows if logistics and regulatory hurdles are addressed. Traders should prepare for continued asymmetry, with Brazil maintaining leverage as the dominant supplier.

Strategic Moves

• Diversify Export Markets: Mexican exporters must reduce dependence on HS Code 99 by promoting machinery (HS 84, 85) and vehicles (HS 87) to Brazil, leveraging existing industrial integration.
• Secure Long-Term Contracts: Importers of Brazilian goods should lock in pricing for critical unclassified items (HS 99) to mitigate volatility, given Brazil’s dominant 54.50% share in this category.
• Optimize Supply Chain Logistics: Both nations should invest in cross-border logistics infrastructure to streamline intra-industry trade, reducing delays and costs for high-value machinery and vehicle components.

Frequently Asked Questions

How did Mexico - Brazil trade perform in 2023 Q3?

Mexico's exports to Brazil totaled $1.15B, with mixed YoY growth, while imports from Brazil reached $3.62B, showing varied YoY performance.

What are the top exports from Mexico to Brazil?

The top exports are unclassified or special category goods (HS Code 99, 38.39% share) and machinery/vehicles (HS Code 87), accounting for 70.25% of total exports.

What does Mexico import from Brazil?

Mexico primarily imports unclassified or special category goods (HS Code 99, 54.50% share), suggesting trade in specialized or non-standardized products.

What is the trade balance between Mexico and Brazil?

Mexico recorded a trade deficit of $2.47B with Brazil in Q3 2023, driven by higher imports ($3.62B) than exports ($1.15B).