With the largest consumer market and GDP in South America, Brazil continues to be an excellent market for experienced U.S. exporters seeking to tap into its diversified economy.  The United States remains its second largest trading partner in terms of imports due to a robust commercial relationship and a shared commitment to mutual prosperity. However, despite strong local demand for U.S. brands and products, complex domestic regulatory and tax frameworks often present challenges to exporters. As a result, having an intimate knowledge of local market trends and regulations is critical to achieving export success in Brazil.

Brazil possesses the second largest economy (US $1.61 trillion in 2021) and the second largest population (213 million) in the Western Hemisphere. Brazil’s geographic territory is larger than that of the continental United States, and business environments often vary by region. A large portion of the population and economic activity is concentrated in Southeastern Brazil, which includes the states of São Paulo, Rio de Janeiro, and Minas Gerais. These states have traditionally served as the engines of economic growth through competitive industries such as manufacturing, agricultural production, mining, and energy. São Paulo continues to be the country’s financial capital and its primary hub for international business activity.

In 2021, Brazil was the ninth largest export market for U.S. products and services, representing $62.07  billion in exports, up 25.7% from 2020, according to the Bureau of Economic Analysis. Important Brazilian domestic industries include agriculture, mining, services and manufacturing. However, U.S. exporters across a wide array of industries continue to achieve local export success thanks to Brazil’s diversified domestic market and demand for international products, including a favorable view of technology and brands coming from the United States. Brazil is Latin America’s largest oil producer, and has become an important global player in the digital economy with 20 domestic startup companies (as of July 2022) having reached unicorn status, with each company being valued at least US$1 billion.

The country’s President-elect, Luiz Inacio Lula da Silva, will assume the Presidency in January 2023. Progress in the bilateral commercial relationship has been gradual but continuous over the last decade, thanks to multiple channels for dialogue between cabinet officials and the private sector. In October 2020, the commercial relationship took an important step forward when the governments of the United States and Brazil signed a new protocol updating the 2011 Agreement on Trade and Economic Cooperation, adding state-of-the-art provisions on Customs Administration and Trade Facilitation, Good Regulatory Practices, and Anticorruption. The update (essentially equivalent to three free trade agreement chapters), ratified by the Brazilian Congress in November 2021, legally binds both governments to the commitments outlined in the three chapters.

The global COVID-19 pandemic greatly impacted Brazil, but following a mass vaccination program, at one point vaccinating as many as 1.4 million individuals daily, in-person business activities resumed.

In addition to being an attractive destination for U.S. exports, Brazil is also the largest Latin American source of Foreign Direct Investment (FDI) into the United States, according to SelectUSA, the U.S. Government’s investment promotion program. Additionally, the U.S. Bureau of Economic Analysis indicates that the Brazilian stock of job-creating FDI in the United States stood at $8.01 billion at the end of 2021.

While Brazil may be a challenging market for many U.S. exporters at the outset, there is undoubtably potential for success for those willing to invest the time and resources necessary to understand and overcome the challenges of doing business within this geographically diverse, resource-rich, and economically dynamic country.