The United States imported more goods and services from Mexico than from any other country in the world in 2023, displacing China for the first time in 21 years, according to data released by the US Census Bureau on Wednesday. Mexican exports to its neighbor totaled $475,606 million last year, a jump of 4.6% compared to 2022. For its part, China sold 20% less to Americans in 2023 compared to the previous year. Exports totaled 427,229 dollars.
The share of Chinese products in total US imports also fell: they stood at 13.9% in 2023, the lowest level since 2004. In 2022, they had reached 16.3%. Behind this reconfiguration of commerce are two factors. First, a frank effort by the United States to “decouple” its economy from that of China, an effort that began since the era of Donald Trump. Second, an effort from Mexico to fill that void through the tools offered by the trade agreement, the USMCA, to promote the country as a destination for companies that want to leave China and relocate to the Latin American country. The most recent data consolidates Mexico as the main trading partner of the United States.
“Reshoring is definitely changing trade,” said Nada Sanders, professor of supply chain management at Northwestern University in Boston, US. “For the first time in decades, Mexico has surpassed China as the leading source of imported goods.” To united states. According to the latest data (which I just had access to) Mexico is filling the gap, and Mexico is slowly increasing. China's share of global merchandise exports has declined in the United States. Besides Mexico, the gap is largely being filled by India, followed by Vietnam, Poland, Indonesia and then Romania. Mexico continues to be an important component,” adds the academic.
In the peak year, in 2017, that proportion had reached 21.6%, the highest since records began. They were different times: the United States and China maintained their political rivalry but were aware of their mutual economic dependence. The recovery of the leading power after the 2008 financial crisis, and the explosion of growth in the Asian country, triggered trade exchange.
But the trade war unleashed during Trump's term began to slow that trend. Both countries raised their mutual tariffs. The growing geopolitical and economic rivalry moved to the technological area. The era of the so-called “decoupling” began, the separation of its technological sectors, and mutual distrust.
The outbreak of the pandemic altered that trend: in 2020 and 2021, Americans rushed to buy all kinds of products made in China. Computers, office goods for teleworking, televisions for leisure, toys, bicycles. In 2022, with the worst of the disease already behind us, it was the complications and delays in global supply chains that kept the numbers rising: once the bottlenecks in the ports were resolved, which prevented the replenishment of products, companies Americans began buying goods to complete their stocks. To such an extent that in 2023 they were still sufficiently full and orders were reduced.
The 2023 data now points to a return to the Trump era trend. Neither country has withdrawn those tariffs. Distrust between the two governments is still present, despite small steps to stabilize the relationship. Among them, the face-to-face meeting between the respective presidents, Joe Biden and Xi Jinping, outside San Francisco during the APEC summit in November last year. And, since 2018, various companies have moved their production from China to other neighboring countries, such as Vietnam, or Mexico.
In Mexico, a promising narrative has been installed that circulates around the nearshoring, although analysts have expressed concerns about whether the country has the necessary infrastructure in water supply, electricity supply and road safety to take advantage of this window of opportunity. Sanders believes that perception is changing. “The current opinion among companies in Mexico is that they can indeed grow and they will,” shares the professor. “There is a definite change in sentiment within Mexico in terms of what they can and will do. This sentiment is a significant change and the country is taking the momentum to fill the void and lead in this space,” says Sanders.
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