Mexican auto sector’s trade surplus with the US is bigger than ever

November 11, 2024

Hands grip the wheel of a Ford car as it drives down a highway — In just the first nine months of 2024, Mexico's auto sector trade surplus with the U.S. was US $104 billion. (Fancey Media/Shutterstock)

The Mexican auto sector enjoyed a significant advantage in balance of trade with its U.S. counterpart during the first nine months of 2024, setting a new trade surplus record in the process.

For the first time ever during the first three-quarters of a calendar year, Mexico’s auto sector trade surplus with the United States surpassed US $100 billion.

From January to September this year, Mexico exported nearly US $137.1 billion dollars worth of automotive goods to the United States, while receiving back auto products valuing just $33.1 billion. The result is a startling $104 billion trade surplus for Mexico.

The Mexican auto sector has enjoyed a steady increase in balance of trade with the United States since 2014 when the trade surplus in the sector was US $46 billion ($72 billion in exports versus nearly $26 billion in imports).

So while Mexico’s auto industry exports to the U.S. have nearly doubled in the past 10 years, sector imports from the U.S. have only increased by 30%. However, the American Automotive Policy Council (AAPC) insisted the trade figures underestimate the amount of U.S. content in Mexican exports, according to the newspaper El Economista.

While the AAPC recognized that Mexican imports have increased, it didn’t see the “official” trade imbalance as a cause for alarm.

A red Chevy Silverado pickup truck in a productin line inside a factory — Mexico’s auto exports to the U.S. have surged over the past decade. (Guanajuato Puerto Interior)

The AAPC pointed out that the US-Mexico-Canada trade agreement (USMCA) — signed in 2020 — increased the regional value content from 62.5% to 75%. This requirement suggests the real trade deficit is substantially lower, it said.

Protectionism concerns

While touting the trade figures, Mexico’s auto sector remains wary of the steps Donald Trump might take when he takes over as U.S. president in January.

The Mexican Automotive Industry Association (AMIA) has urged the Mexican government to prepare to defend the sector against any protectionist measures Trump may take.

“It is imperative that we pay attention to Trump’s public policy proposals and take the necessary actions” to protect the USMCA, AMIA president Odracir Barquera told the newspaper El Sol de México.

Barquera said Mexico is an essential part of the North American supply chain and the United States needs Mexico to compete with China and Asian producers.

According to the AMIA, North America currently produces 17% of all vehicles made in the world, trailing Asian carmakers, which make 55%. At the same time Mexico is the world’s No. 7 producer of light vehicles and is poised to climb past South Korea to No. 6 by the end of this year.

On the topic of the upcoming USCMA revision process, “we trust the Economy Ministry to adequately represent our interests and maintain an open dialogue with the auto industry,” Barquera said.

Barquera said that though he didn’t anticipate wholesale revisions, Trump’s campaign promises and the precedent he set during his first term in office (when he imposed tariffs on imported steel) has forced the AMIA to be ready for any possibility.

With reports from El Economista and El Sol de México