<p>This paper examines the potential and limitations of related diversification as a regional industrial development strategy in Brazil, drawing on the framework of evolutionary economic geography. Using the concept of regional development traps, we analyze the manufacturing sector across Brazilian microregions between 2012 and 2022, classifying them according to sectoral complexity and relatedness density. The results reveal a highly unequal productive structure, in which more complex and technologically intensive activities occupy central and strongly connected positions, while most regions remain concentrated in peripheral sectors with low connectivity. Microregions in the Southeast and South exhibit higher productive coherence and adaptive capacity, positioning them within self-reinforcing complexity loops. In contrast, most regions in the North, Northeast, and parts of the Central West remain locked in structural traps characterized by low complexity and weak sectoral relatedness. We also find strong temporal persistence and a prevalence of regressive transitions, indicating limited structural mobility and reinforcing long-standing patterns of uneven industrial development. These findings suggest that related diversification is strongly conditioned by initial regional structures and may intensify disparities if implemented through uniform industrial policies. Effective strategies, therefore, require place-based approaches focused on strengthening productive linkages and expanding local capabilities.</p>