In the context of intensifying global trade protectionism, today’s Letter IEDI examines Brazil’s trade in manufacturing goods in 2024. The analysis highlights the dynamic hubs, i.e., the destination and origin countries with the highest increases in exported and imported values last year, detailing the products driving their performance.

It is worth noting from the outset that the United States, which has been promoting significant changes in international trade under the Trump administration, was the only major partner to stand out as a dynamic hub in both types of trade flows. In other words, it was among the countries to which we most expanded our exports in absolute terms and from which we most imported in the past year. In 2025, our trade flow with the U.S. continued to grow (+12% in Q1 2025 compared to +9% in Jan–Dec 2024).

Overall, Brazil’s trade balance recorded a surplus of US$75 billion in 2024, a figure 24.6% lower than in 2023. Regarding manufacturing goods, the balance was once more negative: US$-1.3 billion, representing a 20% increase compared to 2023. This result reflects the near stagnation of exports of these goods (US$96.5 billion), which grew by only 0.4% compared to 2023, and the 11% increase in imports (US$227 billion) over the same period.

It should be noted that trade in manufacturing goods is embedded in global production chains and reflects corporate strategies. This makes it challenging to promote significant short-term changes, following exchange rate movements, especially when these are accompanied by uncertainties and a scenario of rising domestic demand, as seen in 2024.

The stability of commodity prices may also have contributed to the more modest growth of our exports of manufacturing goods at the start of production chains (those derived from primary products). Additionally, it is worth observing that the pace of global economic growth has not shown acceleration in recent years, remaining below the 2000–2019 average, as discussed in Letter IEDI No. 1288, “Global GDP: No Acceleration on the Horizon,” from November 2024.

In Q1 2025, Brazil’s exports of manufacturing goods rebounded, growing by 9.3% compared to the same period in the previous year, though this may not persist given the expected global economic slowdown due to the trade war. Moreover, the asymmetry with imports continued, as our foreign purchases surged by 16.2% in Jan–Mar 2025.

In Brazil, both exports and imports of manufacturing goods are concentrated in terms of destination and origin. For exports, the top 20 destination countries account for nearly 80% of total manufacturing exports. In 2024, we expanded our foreign sales to only eight of them, notably to the United States, Belgium, and South Korea, which saw the largest increases in absolute terms.

In the latter two cases, this growth brought localized diversification, as Belgium and South Korea do not rank among the top destinations for our exports (13th and 19th, respectively). The U.S., as is well known, is the primary market for manufactures exported by Brazil.

In the case of U.S. and South Korea, our trade balance did not improve despite the increase in our sales, as it was outpaced by the growth in imports from them. With Belgium, we moved from a deficit of US$1.4 billion in 2023 to a surplus of US$174 million in 2024.

Regarding our foreign purchases, the top 20 countries of origin account for just over 80% of the total manufactures imported. In 2024, 18 of them increased their sales to Brazil. In other words, we imported more and from more international partners than we managed to expand and diversify our exports: this is the scenario we must progressively reverse if we aim to benefit from the profound changes occurring in global trade.

The three countries from which we most increased our purchases of manufacturing goods were China, the U.S., and Argentina, which hold the 1st, 2nd, and 3rd positions, respectively, among the main sources of Brazil’s imports. Thus, 2024 reinforced the leadership position of the largest exporters to Brazil.

The analysis of the product composition of exports to the U.S., Belgium, and South Korea reveals significant diversity in the range of products that stood out in terms of annual export value growth in 2024, reflecting specific factors that may not recur in 2025. This is particularly true for products exported to Belgium and South Korea that recorded very high growth rates, such as “gelatins and glues for industrial use” and “non-electric industrial or laboratory furnaces.”

However, some products with already significant shares in the bilateral export basket, and thus with consolidated markets, also stood out, including “aircrafts,” “gasoline,” and “non-concentrated orange juice” to the U.S., “non-frozen orange juice” to Belgium, and “hydrocarbons and their derivatives” and “heaters, dryers, or heat exchangers, parts, and components” to South Korea.

The rise in trade protectionism and its negative effects on global economic dynamism are likely to intensify trade diversion and heighten international competition, particularly in countries less prepared for this context, whether due to a less active foreign trade policy or competitiveness issues, as is the case of Brazil. In our case, the pressure exerted by China has been documented in IEDI studies, such as Letter No. 1297, “The China Effect on Brazilian Imports’ rise,” and Letter No. 1294, “Complexity of Brazilian Exports and Competition from China.”

However, opportunities for Brazilian exports may also emerge, depending on how tariff increases are effectively implemented, following retaliations and attempts at bilateral negotiations with the U.S. Significant tariffs on Chinese goods, announced in the first four months of 2025, could open opportunities, as discussed in Letter IEDI No. 1305, “Brazil and the U.S.-China Trade War,” although secondary effects, i.e., along production chains and in response to trade diversions, should not be underestimated.

The full text is available in Portuguese