The summer Olympics are doing more than bringing the world together to watch top athletes compete for gold, silver or bronze — the extensive coverage also showcases Brazil, its culture and its people. This likely has a lot of leaders of small and medium businesses here in South Florida wondering about the viability of upping trade with and investment in South America’s largest economy. True, Brazil is currently experiencing some tough economic challenges, but I believe that U.S. companies that carefully plan and execute international business with Brazil can ultimately come out ahead.
The sheer size of the Brazilian marketplace continues to produce powerful business opportunities for many international companies. Brazil’s large and dynamic economy places it squarely on the world stage; businesses around the globe will continue to look to its 201 million residents for robust business growth.
Agricultural equipment and services, aircraft and parts, and medical equipment are just some of the top exports for U.S. businesses. Brazil remains the world’s eighth-largest economy and the biggest economy in Latin America. In 2015, in fact, Brazil ranked 11th on the list of largest-goods export markets for the United States.
Make inroads and monitor tariffs
So how can South Florida businesses get a piece of the $27 billion worth of goods Brazil imports from the United States (according to World Bank 2015 estimates)? In addition to shipping goods directly from the U.S., I recommend finding a strategic partner in Brazil and/or setting up a physical presence inside the country. These strategies can boost success for U.S. businesses because Brazil’s business culture relies heavily on development of strong personal relationships.
Also, be aware of how trade tariffs work with Brazil. U.S. companies generally pay the taxes and fees during the Customs clearance process. Keep an eye on the import duty, the Industrialized Product Tax, and the Merchandise and Service Circulation Tax, which generally comprise the majority of import costs. The Agreement on Trade and Economic Cooperation outlines the specifics of direct trade and investment between the two countries. The agreement is also designed to drive future business: It encourages the United States and Brazil to cooperate on innovation, trade facilitation and other key issues.
See a challenge as an opportunity
The current cooling of Brazil’s domestic market can spur new opportunities for strong international trade relations. Even in trying economic times — and sometimes, especially during them — exporters to Brazil can do well.
Like many other international business leaders, I am hopeful Brazil will address its issues and soon reestablish itself as one of the most successful world economies. Even after the athletes return home and the Olympic-size fanfare focused on Brazil dies down, the country will not disappear from the world’s trading stage. U.S. businesses that take a measured and informed approach to trade with Brazil now can take advantage of greater openness toward exports and could potentially benefit greatly in the long term. The Olympic podiums aren’t the only place in Brazil where you can find gold.
Greg Hewitt is CEO of DHL Express U.S., a firm headquartered in Plantation that offers express delivery services and international shipping in more than 220 countries and territories.