Two-way trade with U.S. reaches all-time high

After falling more than 20% amid the pandemic shock in 2020, the Brazil-United States two-way trade recovered more than expected last year and reached an all-time high of $70.5 billion. That means a 43% year-over-year growth, or 9.3% more than the amount seen in 2019, of $64.5 billion.

The data are from the U.S.-Brazil Trade Monitor prepared by the American Chamber of Commerce for Brazil (Amcham). “We expected some recovery after the drop seen in 2020, but this is very substantial,” said Abrão Árabe Neto, Ancham Brasil’s executive vice president.

Brazil, which typically has a deficit trade balance with the U.S., reported a record negative balance also in 2021, of $8.3 billion. This deficit was the country’s largest with a trading partner last year, Amcham said.

The U.S. remained Brazil’s second main trading partner, with a 14.1% share in 2021, behind China. The Asian giant accounts for 27.1% of the pie.

Brazilian exports to the U.S. reached the unprecedented amount of $31.1 billion last year, up 4.7% from 2019, before the pandemic. They were driven by rising prices in sectors such as steel and oil and increased U.S. demand. “Domestic demand started heating up again in the U.S., which has been driving exports,” Mr. Árabe Neto said.

Brazilian imports totaled $39.4 billion, up 13% from 2019, an all-time high driven by broader factors. The result was boosted by purchases of natural gas and vaccines to tackle the water crisis and the pandemic, respectively. The previous peak, of $36 billion, had been seen in 2013.

U.S. natural gas purchases, which grew 2,330% from 2020 and totaled $3.3 billion last year, fueled Brazilian thermoelectric power plants. Brazil was the world’s fourth largest buyer of liquefied gas from the U.S. in 2021, Amcham said. “In value, liquid gas was Brazil’s second most imported product from the U.S. If we look at other years, imports were very low: $244 million in 2018, $269 million in 2019, $135 million in 2020,” Mr. Árabe Neto said.

Brazil’s mass vaccination against Covid-19 led to a 406% increase in vaccine imports in 2021, compared to 2020, totaling $2.3 billion. Petroleum fuels, however, remained the main product imported by Brazil ($7.4 billion).

Amcham projects a moderate increase in Brazil-U.S. two-way trade over 2022. “There is a considerable degree of uncertainty around the world,” Mr. Árabe Neto said. On the one hand, the performance of the economy and global trade tends to remain positive, although at a slower pace than in 2021.

The opportunities opened up by Joe Biden’s multi-billion infrastructure plan, a weakened real against the dollar this year and the high prices of key products like oil and pulp are likely to drive Brazilian exports to the U.S. On the other hand, this year will still be impacted by considerable uncertainty associated with possible new waves of the pandemic, fast inflation, China’s slowdown, supply chain failures, and geopolitical and climatic events.

Uncertainties such as that imposed by elections in Brazil affect the expectations of economic agents, Mr. Árabe Neto said. But he also says companies exposed to the Brazil-U.S. two-way trade already have consolidated operations. “Of course, the political scenario has a relevant influence on the international trade and investments, but we will continue to have favorable aspects for bilateral trade,” he said.

From the U.S. standpoint, he said, Brazil has also shown itself to be a relevant partner. “Among the main U.S. export destinations, Brazil was the second fastest growing. Brazil is not in the top 10 of American imports [in values], but was the second fastest growing in relative terms,” Mr. Árabe Neto said.

Source: Valor international

https://valorinternational.globo.com/