For the last four years, U.S. trade with Mexico has set a record for the month of July. Imports have … [+] set a record all four years while exports have done so three times.
ustradenumbers.com
Mexico was the top market for U.S. exports in July for only the third month ever, according to my analysis of the latest U.S. Census Bureau data, released last week.
Mexico passed Canada in the month of July to rank as the top source of U.S. exports.
ustradenumbers.com
Significantly, all three months have been within the last year — the other two were in January and last October — as Mexico cements its stature as the United States’ most important trade partner.
For the month of July, it slipped past Canada. U.S. exports to Mexico increased 3.73% from June to July compared to a decrease of 7.38% for Canada. U.S. exports to Mexico for July were valued at $28.72 billion while those to Canada totaled $27.70 billion.
Five of the top six top categories for Mexican imports into the United States are related to the … [+] automotive industry, with just those five accounting for about 30% of the total value of U.S.-Mexico trade in July.
ustradenumbers.com
On the import side, Mexico has been the United States’ largest source 16 of the last 17 months.
As the top overall trade partner, Mexico ranks ahead of Canada and China. The three, when combined, tend to make up about 40% of total U.S. exports and imports, leaving the remaining 60% to another 220-plus nations.
For total exports and imports, Mexico was the United States’ largest trade partner in 2019 and 2023, and is on the cusp of becoming the third trade partner to rank first at least two years in a row this year.
Canada ranked first for decades but last ranked first two years in a row in 2021 and 2022. China’s longest streak was three years beginning in 2016 and ending in 2018 with the tariffs imposed by former President Donald Trump and continued by current President Biden.
As Mexico’s trade has increased, the United States has seen its deficit with its southern neighbor grow rapidly, though the balance of trade — the ratio that results from exports divided by total trade as opposed to exports minus imports, which is the deficit or surplus — is minimally changed and far more balanced than that of the United States with China.
Mexico’s trade with the United States is a little less balanced than in 2018 but almost equal to the … [+] U.S. average and far more balanced than U.S. trade with China.
ustradenumbers.com
Trade deficits tend to be seen as “losing” or a sign of weakness by almost everyone except most economists, academics and policy wonks. The United States actually has more trade surpluses with other nations than deficits, 132 to 99, despite an overall deficit.
But there is no doubt that the size of the U.S. deficit with Mexico is getting closer to that of China’s.
In 2018, for example, the U.S. deficit with China — the nation’s largest — was more than five times that of the U.S. deficit with Mexico, $222.32 billion vs. $41.28 billion, according to year-to-date data through July.
In 2020, just two years later, Mexico’s U.S. deficit was slightly more than one-third the size of China’s, $55.78 billion to $161.45 billion. Through the first seven months of this year, Mexico’s U.S. deficit is more than two-thirds the size of China’s, $95.93 billion to $157.78 billion.
The trade balance, meanwhile, exports divided by total trade, has fallen from 44% U.S. exports and 56% U.S. imports to 40% exports and 60% imports. The U.S. average during that time has shifted from 40% to 39%. In tends to move slowly. China, incidentally, has gone from 20% U.S. exports to 25%.
While the trade balance doesn’t offer fodder for a relationship already challenged by the illegal flow of immigrants and Fentanyl, and the mandatory review of the USMCA in 2026, the deficit might, particularly if Trump wins reelection. While Democratic candidate Kalama Harris’ trade policies are largely unknown, she is not expected to be as strident on international trade issues, though no free-trader.
Nevertheless, expect Mexico to pay a larger role in U.S. policy and politics than it has in recent years.
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Publish date : 2024-09-13 22:00:00
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