Mexico is within a percentage point of being the top U.S. trade partner with the United States. … [+] Canada has held that rank for more than 30 years,
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Mexico has topped $400 billion in two-way trade with the United States faster than any nation ever has, according to my analysis of U.S. Census Bureau data released this week.
A development with more far-reaching implications is that it is on the verge of a “trade trifecta” — leading the United States for total trade, total exports and total imports — something it has never done.
This “trade trifecta” possibility comes as Mexico finds itself under intense U.S. scrutiny for illegal border crossings of both millions of foreigners and the toxic drug fentanyl, which has led to hundreds of thousands of overdose deaths.
President-elect of Mexico Claudia Sheinbaum speaks during a press conference on Thursday in Mexico … [+] City. (Photo by Jeannette Flores/ObturadorMX/Getty Images)
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Against this backdrop, Mexico elected Claudia Sheinbaum, its first female president, and the United States could follow suit as polling data suggests Vice President Kamala Harris is in a close race with former President Donald Trump.
Neither Sheinbaum nor Harris is likely to be an overt proponent of free trade, given their past politics. But both would likely be reluctant to take measures that would damage the flow of two-way trade, which totaled $415.38 billion through June, a record.
Democratic presidential candidate, U.S. Vice President Kamala Harris gives a thumbs up during a … [+] campaign rally at United Auto Workers Local 900 on Thursday in Michigan. (Photo by Andrew Harnik/Getty Images)
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Neither Sheinbaum nor Harris is likely to be an overt proponent of free trade, given their past politics. But both would likely be reluctant to take measures that would damage the flow of two-way trade, which totaled $415.38 billion through June, a record.
With Trump, no proponent of free trade, it’s a little less clear what he might do. In addition to threatening tariffs on all U.S. imports and more severe ones on China than those he imposed while in office, he has again threatened to close the U.S.-Mexico border to stem the flow of illegal entries.
With this stew of opportunities and challenges, Mexico should be elevated to one of the four “hot spots” for the incoming U.S. president, whether it is Harris or Trump, the other three being China and its ambitions in Asia, including Taiwan; the Middle East with Israel’s war with Hamas and the influence of Iran with Hezbollah in southern Lebanon and the Houthi rebels in Yemen; and Russia’s continued assault on Ukraine, despite significant U.S. and Western Europe support for the latter.
With Mexico, the challenge for the two new presidents will be how to slow the flow of illegal people and drugs without dinging the largest trading relationship in the world.
While it doesn’t yet rank first for U.S. exports, Mexico ranks first for total U.S. trade and total imports through June, as it did for the full year of 2023 also.
It is on the verge of ranking first for exports. Mexico has pulled to within 5.78% of Canada for the value of exports. through June, the most recent data available.
Canada has ranked first since 1992, the oldest data available, and possibly much longer. This year, it is accounting for 17% of U.S. exports while Mexico is accounting for 16%.
Significantly, this year is the first time the gap between the two countries has fallen below 10%. That difference is 5.78%, less than half of what it was just four years ago. It’s less than a quarter of what it was a decade ago. While unlikely it will happen in 2024, there’s a good chance it could happen sometime in 2025.
Mexico’s stature as the top U.S. trade partner has been solidified this year behind a $19.16 billion increase in total trade. That is the most for any U.S. trade partner in the world.
That gain stands in sharp contrast to a $4.49 billion decrease for No. 2 Canada and a $6.21 billion decrease for No. 3 China. I mention these other two because just these three nations consistently make up more than 40% of all U.S. trade among more than 200 trade partners, with this year being no exception at 41.13%.
On imports, Mexico first ranked No. 1 on an annual basis just last year. It took the crown from China, which has been hobbled by harsh tariffs first imposed by Trump and then continued by current President Biden.
It was in 2019 that Mexico was the top-ranked U.S. total trade partner — combining exports and imports — for the first time, though it ranked behind Canada for exports and China for imports that year.
The only other nation to have every ranked first for exports, imports and total trade is Canada, which last did so 14 years ago.
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Publish date : 2024-08-09 22:15:00
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