In a rapidly changing international framework, relations between Italy and Brazil maintain a solidity characterized by historical bonds based on cultural affinity. There are still potential areas for strengthening economic and industrial ties between the two countries, as well. The main economy of Latin America remains fundamental for Italy, in a scenario where competition for strategic resources — raw materials, rare earths, advanced technologies, manufacturing capacities — is increasingly central in both macroeconomic and corporate decisions. Moreover, the increasing economic weight of the BRICS opens up space for new configurations of alliances, in which the resources of countries like Brazil — agricultural, energy, mineral — assume a growing strategic value, especially if accompanied by European technology transfer.
Brazil is going through a phase of moderate but constant growth, with a GDP expansion estimated between 2% and 3% annually over the last four years, an unemployment rate at historic lows, and inflation under control. The reference interest rate, around 14.5%, remains high, however, and represents a significant drag on investments. The country possesses an energy matrix with a very strong contribution from renewable sources, the result of decades of energy policies, and is committed to a structural transition from an extraction-oriented economy toward a knowledge economy. On the political front, Brazil maintains a stable institutional balance among the various state powers. This is expected to hold true even through the presidential elections in October, despite the climate of strong polarization.
Against this backdrop fits the agreement reached between the European Union and Mercosur. After twenty-five years of negotiations, the accord represents a watershed in relations between the two blocs thanks to the creation of a trade area of nearly 800 million consumers. The market is equal to approximately one-fifth of global GDP, with an estimated combined economic value in the order of 20,000 billion euros. In addition to the tariff component, the agreement provides for a simplification of customs procedures and a framework of shared economic governance, although certain regulatory criticalities remain in both Brazil and Italy. The agreement can be considered not only a trade tool, but also a step in a broader path toward greater strategic autonomy for the Union.
Within this framework, the Italian vote in the European Council was decisive in allowing the dossier to advance. For an exporting economy like Italy, the expected benefits indeed concern both access to a market of 210 million people — more than 30 million of whom are of Italian origin — and the consolidation of its position as Brazil’s third-largest European trading partner. Italy recently overtook Spain and is drawing closer to the Netherlands, though Dutch data are influenced by the country’s port relevance in extra-EU trade.
On the bilateral level, commercial trade between Italy and Brazil touched an all-time high in 2025, with a value exceeding 11 billion. This growth is also thanks to the driving force of Italian exports of machinery and pharmaceutical products. There are over 1,100 Italian companies active in the Brazilian market, many of which have been integrated into supply chains connected to large industrial groups present since the 1970s, particularly in the automotive sector. In parallel, investments are also flowing in the opposite direction, as Brazilian companies and families look to Italy as a gateway to the European market, also in light of the difficulties of entering the US market and tensions with China, which nevertheless remains Brazil’s main trading partner.
The solidity of bilateral economic relations clearly highlights the need to deepen cooperation in high value-added areas: technology, artificial intelligence, the space sector, renewable energies, and green hydrogen. On the security front, bilateral cooperation also extends to the defense sector, with precedents of joint development of weapon systems and recent acquisitions of Italian equipment by the Brazilian armed forces. Still underutilized, however, is the potential of the culture, entertainment, trade fairs, and sports industry, which has grown in Brazil by 6% annually over the last decade — compared to a global average of 4.5% — and is capable of generating between 7% and 8% of the national GDP.
To best take advantage of the opportunities offered by the Brazilian economy, Italian small and medium-sized enterprises nevertheless require both financial and cultural support, which is decisive in tackling a market perceived as distant and complex despite historical affinities. A key role can be played by public instruments for supporting companies, as well as by the diplomatic-consular network, in a virtuous collaboration between the public and private sectors. The main obstacles to overcome are linked to Brazilian bureaucratic and customs complexity, the need for a non-homogeneous approach to the different states of the federation, and a high cost of domestic capital, which makes “patient capital” from Europe, through guarantees and long-term loans, crucial. Ultimately, a considerable margin of growth remains unexpressed: translating the solidity of the bilateral relationship into a more structured economic and industrial cooperation appears today as a priority for both countries.