Clothes, iPhones and TVs made in China have long made the Asian giant the biggest supplier of foreign-made goods to American consumers.
No longer.
A steady increase in imports from Mexico during the past decade have made the southern border the biggest hotspot in global trade.
Mexico has doubled its imports to the U.S. since 2010, and this year, it’s on track to surpass China as the nation’s biggest supplier of foreign-made goods and services. China held that unofficial title since 2008.
The evolving pattern of trade comes as no surprise.
Relations between the U.S. and China have become chilly since the Trump administration.
Initially, the disputes centered on trade — President Trump slapped major tariffs on China — and they have since spread to political and other tensions.
The pandemic played a big role, too.
Read this next: Here’s how the U.S. can become less dependent on China for trade
The resulting economic shutdowns around the world disrupted world trade flows, caused major supply shortages and spawned the biggest global spike in inflation in decades.
Tense U.S-China relations have forced multinational companies to either pull out of China or seek other sources of supplies in friendly countries or those closer to U.S. borders where it is cheaper.
Enter Mexico.
The country had already become one of the three biggest trading partners with the U.S. following the NAFTA free-trade deal in the late 1990s. After the pandemic, more companies relocated operations there while other firms found new sources of supply in Mexico so they would be less reliant on China.
Mexico recently became the biggest trading partner of the U.S., a distinction it’s never held. And now it’s overtaking China as the top importer.
Take note: Trade deficit climbs 5% to $61.5 billion as U.S. imports snap back
Major imports from Mexico include new cars and trucks, appliances, machines and agricultural goods such as fruit and vegetables. They account for about 70% of all Mexican imports.
In the first six months of 2023, U.S. imports from Mexico totaled $239 billion, compared to $219 billion with China and $214 billion with Canada, government figures show.
Trade flows between the U.S. and its northern and southern neighbors are also not as lopsided as the U.S. relationship with China.
The U.S. only exported $77 billion in goods and services to China in the first six months of the year, a large chunk of it soybeans.
By contrast, American exports totaled $177 billion to Canada and $160 billion to Mexico in the same period.
The shift to Mexico from China as the primary source of imports is unlikely to reverse course, either.
Chinese imports have shrunk 24% through the first nine months of 2023 compared to the same period in 2022.
Read the full article here
