If your small or medium-sized business is considering initiating or expanding cross-border trade in South America, then you need to understand the intricacies of the markets, the particular customs requirements involved, and the opportunities that exist within your particular industry. Achieving this kind of understanding means doing the research and investigating the specific countries you want to target.

You will also find useful insight from the U.S. International Trade Administration (ITA), which is currently promoting a South America Trade Mission and Business Conference, scheduled to occur in Sao Paulo, Brazil in May 2022. As the ITA notes, the South America region is closely tied to the U.S. by history and geography, and it is home to 397 million potential customers who imported over $121 billion in U.S. goods in 2019 alone. In addition, to expand DHL’s connections and further support our customers, we have also added new flights to and from South and Central America, including Chile, increasing capacity with service reliability throughour dedicated air network.

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Given the immense potential for growth in South America for your company, it makes sense to learn more about the individual countries and how each might fit with your organization.  Let’s take a closer look.

Argentina

What does your company need to know about this country of 44 million people? 18.3 million Argentine adults, or 90% of those considered “connected” online, have made web purchases at least once, and Argentina has the highest percentage of internet users in South America. Most e-commerce purchases of U.S. products are made through the websites of local importers, and that’s a key fact for your business to know.

Here are some more important considerations:

  • 90% of U.S. exports to Argentina are used in local industry and agriculture, including refined oil, airplanes and airplane parts, computers, industrial and agricultural chemicals and equipment, machine tools, and parts for oil field rigs.
  • There are significant opportunities for U.S. companies in infrastructure, energy, health, agriculture, information technology, and mining.
  • At a national level, the General Customs Bureau (Dirección General de Aduanas, DGA) applies, collects, and controls taxes under the Argentine Customs Code. Additionally, it regulates other taxes on import and export transactions on behalf of other entities. In general, the DGA applies and controls import and export transactions. DHL can help your company understand the customs requirements, duties, taxes, and documentation involved in conducting trade in Argentina.

Brazil

The largest country in South America by population, Brazil offers U.S. companies a critical audience of potential buyers. In the e-commerce space, the country has seen tremendous growth in the last two years, due in great part to the pandemic. According to the ITA, the first half of 2021 saw a 31% growth in e-commerce sales in Brazil, and in 2020 the number of online consumers jumped by more than 40%. U.S. companies looking to sell online in the country should be aware of the challenges that exist relative to customs and taxes.

Top markets for U.S. exports to Brazil include aircrafts and parts, medical equipment, cosmetics, toiletries, and fragrance.

Chile
In this country of more than 19 million people, the auto parts industry is a key sector for U.S. exporters. There is no significant local production of auto parts or accessories, and as of 2020, U.S. parts led the market, accounting for $129M in auto imports. Other key areas export areas include agricultural and mining equipment, safety and security equipment, and information technologies. According to the ITA, Chile’s IT sector is a top emerging area, with the need for hardware, software, and IT services on the rise in hospitals, banks, shops, hotels and more. Chile is number two in South America in terms of digital growth, with a total market of $6.4 billion in 2020.

Colombia

In 2018, the U.S. exported more than $15 billion in goods to Colombia. As in other countries, e-commerce has grown tremendously as a result of the pandemic, and Colombia now ranks third in South America for online purchases (after Brazil and Argentina). As the ITA explains, many products sold in the country are moved through local companies on sites such as linio.com. Linio, Mercado Libre, and Dafti are the biggest e-commerce players in the Colombian market, and they allow sellers to reach a wider audience and create a serious presence. Social media plays a big role in providing consumers in with information about products, and Facebook use in the country is high.

Beyond retail, other top sectors in Colombia include renewable energy systems, IT, infrastructure, and medical equipment. For U.S. companies, customs regulations can be challenging, as rules change frequently with little notice. It’s important to work closely with international logistics experts to keep up to date on current requirements.

Peru

Peru has had one of the fastest growing South American economies since 2002, and it is well integrated into the global marketplace thanks to a series of free trade agreements, including the United States-Peru Trade Promotion Agreement (PTPA), which entered into force in February 2009. The PTPA eliminated tariffs on almost 90% of U.S. agricultural product exports, with remaining tariffs being phased out by 2026, and since its implementation, U.S. goods and services trade has increased to more than $23 billion from $9 billion.

Construction and infrastructure development are among the top segments for U.S. companies, with a high need in Peru for construction equipment and parts. Several large mining, power generation plants, natural gas production and transportation projects have been undertaken, and housing and office building construction has increased dramatically.

Other key areas include food processing and packaging, safety and security equipment, medical devices, and textiles and apparel.

Is your business considering trade in South America? Let us know on Twitter @DHLUS.

Serious about going global? Your brand can reach 220 countries. Get started today.