The figures come from the Institute for Industrial Development Studies (IEDI), based on data from the Secretariat of Foreign Trade (Secex/MDIC). The study analyzed manufacturing trade performance across four levels of technological intensity, following Organisation for Economic Co-operation and Development criteria: high technology, medium-high, medium, and medium-low technology.

The report shows that despite strong export performance in sectors such as aircraft manufacturing—which also saw a decline in imports—imports increased in key industries such as automobiles and pharmaceuticals. The medium-low technology group, which usually offsets deficits in higher-tech industries, remained in surplus, though with a smaller positive balance than in the first quarter of 2025.

The manufacturing deficit from January to March was mitigated by strong export performance in high-technology industries, particularly aircraft manufacturing, said Rafael Cagnin, chief economist at IEDI.

Brazil’s total exports of manufactured goods reached $43.9 billion in the first quarter of 2026, a record level in current dollar terms for the period and $1.2 billion above exports in the same months of 2025. Growth in aircraft export revenue accounted for 59.6% of this increase.

Cagnin said aircraft exports are volatile because they involve high-value products tied to the delivery schedule of Brazil’s leading manufacturer, Embraer. He also noted a relatively weak comparison base. Early in 2025, he said, major trade tensions were already emerging as markets awaited the direction of U.S. President Donald Trump’s tariff policy. During the last year, however, aircraft were exempted from Trump’s sweeping tariffs and effectively “shielded” from harsher trade measures. “That allowed the sector to continue operating relatively normally,” he said.

In addition, Embraer increased aircraft deliveries in the first quarter of 2026, especially in commercial aviation. “There is a backlog among major global aircraft manufacturers, and Embraer has managed to expand market share in this environment. The company has been innovating, moving further into larger aircraft segments with competitive energy performance,” Cagnin said. He added that Embraer has also expanded into defense and security, an area seeing growing demand amid rising global military spending. “Although it is only one quarter, the period reflects the company’s portfolio diversification strategies over recent decades.”

Even with stronger aircraft exports, the IEDI report shows that the high-technology group still posted a trade deficit of $11.4 billion in the first quarter, maintaining its traditionally negative balance, though improving from the $12.5 billion deficit recorded in the same period of 2025. In addition to aircraft manufacturing, the high-tech group includes pharmaceuticals and electronics. Those two industries stood out for rising imports, up 21.6% and 5.3%, respectively, from January to March compared with the same period last year. Overall imports for the group, however, fell 2.5%, also influenced by aircraft imports, which declined 45.7% over the same comparison.

A negative highlight, according to Cagnin, came from the medium-high technology segment. The group—which includes weapons, automobiles, machinery and equipment, and medical instruments, among others—posted a 4% decline in exports in the first quarter compared with the same period of 2025. But the economist said imports were more concerning. Imports in the group rose 3.6%, driven largely by automobiles, which jumped 23.6%.

“It is the China effect, with electric vehicles, which highlights a major challenge for Brazil’s automotive industry both domestically and abroad,” Cagnin said. Chinese competitiveness, he noted, extends beyond the automotive sector. “China’s gain in the manufactured-goods market share across Latin America is increasing, often displacing Brazilian industry not only because it produces similar products, but because it has technological dynamism that allows it to capture market share with new products. We have been viewing the vehicle issue more from a short-term perspective, but it reflects a structural transformation of the market and very strong competitive pressure from innovative products.”

Overall, the medium-high technology group closed the first quarter with a trade deficit of $20.2 billion. While deficits are typical for the segment, this year’s negative balance widened 7.8% compared with the same period of 2025.

The IEDI report highlighted positive performance in medium-technology goods, whose exports rose 10.6%, driven by the metallurgy industry, which increased 15.3%. Imports in the group also rose, but at a much slower pace of 2.9%. The segment closed the first quarter with a deficit of $680 million, significantly lower than the $1.2 billion deficit recorded in the same period of 2025. The report noted, however, that the negative balance at the start of this year was affected by the accounting treatment of oil platforms, which, since last year, have distorted certain quarterly figures. Excluding shipbuilding, where these assets are recorded, the medium-technology segment would have posted a surplus of $1.8 billion from January to March. In addition to metallurgy and shipbuilding, the medium-technology group includes industries such as rubber and plastics manufacturing and non-metallic mineral products.

The medium-low technology group, meanwhile, was a negative surprise, Cagnin said. Traditionally in surplus, the segment typically offsets deficits in industries with greater technological intensity. According to the economist, some sectors face structural innovation gaps that translate into chronic trade deficits. “Especially in higher-tech industries, with a few notable exceptions such as aerospace.”

The medium-low technology segment—which includes apparel, footwear, wood products, furniture, metal products, petroleum products, food, and beverages—has historically helped cushion these deficits. “But this group has been posting very weak, stable performance,” he said.