Mexico has a thriving economy that offers the US a ton of mid-level manuf ops and a strong work force. Today because of this we have zero net immigration from the country.
Over the past two decades, approx 11 million Mexicans have come to the US and are now integrated into our economy. I don't recall this nation putting any of those folks up in hotel rooms.
Mexico likely just did something it hasn’t done in 20 years: surpass China as the largest exporter to the US.
Data released by the US Census Bureau this week show that very milestone happening in the first 11 months of 2023, and while figures for December won’t be released until Feb. 7, it appears that Mexico is on track to beat China as America’s top source of imports.
Graphic: (Quartz)
It looks like the US’s wish to become less dependent on its geopolitical rival is coming true—except in a few key areas that might always keep the economies tied.
As global trade flows shift amid an intensifying great power competition between Washington and Beijing, the US is moving to import less from China in an effort to reduce dependencies on its chief geopolitical rival.
Data released by the US Census Bureau on Tuesday (Jan. 9) show Mexico surpassing China as the largest exporter to the US in the first eleven months of 2023. While figures for December won’t be released until Feb. 7, it appears that Mexico is on track to beat China as America’s top source of imports. That would be the first time it has done so since 2003, according to official statistics.
China’s slumping share of US imports
US imports from China for January to November 2023 fell more than 21% compared to the same period a year earlier, according to US Census Bureau data. Over the same period, US imports from Mexico grew nearly 5%.
In terms of America’s total imports from all trading partners, China accounted for 13.9% — the lowest since level since 2004, and a sharp drop from about 21% between 2015 and 2018. Meanwhile, Mexico’s share of total US imports grew to 15.5% in the eleven months through November, hitting a record high.
De-risking while still tightly bound
Of course, there are still deep and enduring dependencies between the US and China, even as the two countries appear to grow further apart. Rare earths are one example: The US is heavily reliant on China for rare earth metals and permanent magnets, while China relies on the US for 50% of its rare earth raw material imports.
There is as yet no full-blown decoupling, if we define that as the severing of key economic ties between the two nations. But Beijing’s and Washington’s push to de-risk their respective relations with each other is already having an effect on international trade patterns.
Take, for example, the observation by economists at the Bank of International Settlements that global supply chains are getting longer and twistier in the age of on-shoring and friendshoring.
Elsewhere, shipping is getting shaken up as manufacturers increasingly move certain segments of their production chains out of China and towards neighboring countries, in particular Vietnam.
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