Continuing to update my trade data alphabetically, here’s a graph depicting the trade situation between the U.S. and Brazil.
A few observations are in order:
- Brazil is only slightly less densely populated than the U.S. In such a situation, my the theory I put forth in Five Short Blasts would predict something close to a balance of trade. In fact, that’s what we have. Although the U.S. swung to a trade deficit from 2002 through 2006, we have since returned to a small trade surplus, thanks to surging exports of manufactured goods to Brazil, off-setting a rise in oil & gas imports.
- Once again, as was the case with Australia (see my previous post) the U.S. has a trade deficit with Brazil in every category of natural resources: food, oil and gas, metals & minerals, and lumber. If I were a Brazilian, I’m not sure I’d be happy with trading away our natural resources for manufactured products. More evidence that the U.S. could benefit by stabilizing and even reducing its population.
- This is a case where free trade (or a close approximation thereof) works. There’s no need for any protectionist measures on either’s part.
Next up: Canada.