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USA Trade with Brazil 2005-2014

USA Trade with Brazil 2005-2014
Source: Your US-Brazil Trade Assist

Finally…I have completed my yearly three-month project of updating my website featuring Your US-Brazil Trade Assist. For the most part, it’s tedious work—checking for broken links—but important for providing users with useful and current information.

Based on the US International Trade in Goods and Services January 2015, published on March 6 by the US Census Bureau, the above chart shows US trade with Brazil over the last ten years. Brazil is America’s ninth largest trade partner with total trade (imports and exports) in goods and services valued at US$72.8 billion, representing 1.8 percent of US trade with all countries. America’s top three trading partners are Canada (16.6%), China (14.9%), and Mexico (13.5%). As is evident in the chart, since 2008 US exports to Brazil far exceed its imports. Given Brazil’s weak economy, the contraction in exports in 2014 could persist this year.

According to Brazil’s trade statistics (see Chapter V- Balance of Payments) issued on March 18, the United States (including Puerto Rico) ranks in second place among Brazil’s top trading partners. China holds first place; Argentina comes in third. Charts showing imports and exports by region for 2014 are available here.

On March 6, for the first time since August 2004, the exchange rate for the US dollar exceeded R$3.00 (three reais); as at March 27, the rate is R$3.2253. This is bad news for Brazilian importers since they now have to pay more local currency for their imported goods and services. Manufacturers who use imported raw materials will also feel the pinch, since their production cost will increase. With the hike in international airfares and less foreign currency to spend, middle-class Brazilians with plans to vacation overseas will have to opt for national tourist hotspots.

On the other hand, it’s good news for Brazilian exporters who will receive more reais for their dollars. Others benefitting from the devaluation of the real are local manufacturers whose products will become more competitive against their imported counterparts. A demand for local products could result in increased production and employment opportunities.

The devaluation of the real only adds to the woes of the general population who are already suffering from the rising cost of living. The Petrobras kickback scandal, leading to a political crisis and threat to downgrade Brazil’s investment-grade rating, has crippled an already weak economy. On Sunday, March 15, thousands of anti-government Brazilians in over 160 cities across the country took to the streets, calling for the impeachment of President Dilma Rousseff.

Brazil’s first democratically elected female president is under pressure. Her popularity among Brazilians plummeted below 15 percent. News released on Friday by the IBGE Statistics Bureau promises more pressure: Brazil’s economy grew just 0.1 percent last year, the worst result since 2009. Envisioning no major changes in prevailing economic conditions, national and international, economists predict a slump into recession this year.

Brazilians will have to tighten their belts even more.