The recovery of post-pandemic Brazil-US bilateral trade
The year 2020 was marked by a profound contraction in bilateral trade between Brazil and the United States, partners since 1935, when the Brazil-United States Trade Agreement was signed. According to the Ministry of Economy's Foreign Trade Secretariat (SECEX), Brazilian exports dropped 27.8% compared to 2019 and, in absolute terms, the United States was the most affected partner among Brazil's main partners. The negative effects caused by the pandemic and the fall in the international price of oil help to understand the contraction in trade. In addition, trade between countries is formed, above all, by products with higher added value, those most affected by the global crisis.
US economic recovery and advance of Brazilian exports
After reaching the lowest mark in the last 11 years in 2020, trade between Brazil and the United States has been recovering thanks, mainly, to a strong expansion of Brazilian exports. In the last quarter of last year, the lowest rate of contraction of Brazilian exports to the United States in the year was registered, pointing to a trajectory of recovery in 2021.
According to Amcham Brasil's Brazil-US Trade Monitor, Brazilian exports grew 32.9% and imports increased 8.7% over the same period in 2020, which keeps the US as Brazil's second largest trade partner of goods, behind China. The advanced stage of vaccination and US government stimulus packages increased foreign demand, including for products imported from Brazil. Brazilian exports to the US, in the first half of 2021, represented 9.8% of the country's total exports in the period.
Consistent increases in most of the export basket
In May, the recovery, which had already been confirmed in the first months of this year (2021), gained consistency among the five main products in the Brazilian export basket to the United States. According to the Comex Stat, four of these five ended the period with consistent increases: semi-finished iron or steel products (up 78.0%), oil (up 26.7%), aircraft (up 75.6% ) and unroasted coffee (up 14.8%). On the US side, four items also showed consistent increases: engines and non-electric machines (17%), natural gas (752% increase), other products from the manufacturing industry (4.69%) and aircraft (strong increase in US $108%).
The importance of assistance from an international consultancy
Given the positive scenario in which bilateral trade between Brazil and the United States is found, it is essential to build an effective export strategy and mapping. An international consultancy, at this time, can target your product more assertively within the country, ensuring a better performance in the foreign market, with a Market Analysis or a List of Buyers.
By Luiza Chucre on 8/18/2021