Mexico retained the enviable title of top exporter to the United States in January, sending products worth more than US $38 billion to its North American neighbor, according to U.S. government data.
Mexico also remained the United States’ top trade partner in the first month of the year, with two-way trade between the countries increasing just under 1% in annual terms to $64.52 billion, the highest figure ever for the month of January.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis published data on Thursday that showed that Mexico’s exports to the United States were worth $38.04 billion in January, a 2.8% increase compared to the same month of 2023. That was Mexico’s highest ever revenue total for exports shipped to the United States in the month of January. The value of Mexican exports to the U.S. has now risen during nine consecutive months.
Mexico ranked ahead of China and Canada as the No. 1 exporter to the U.S. in January. While the value of Mexican exports to the U.S. increased, the value of those from both China and Canada fell.
In 2023, Mexico surpassed China to become the top exporter to the United States, ousting the East Asian economic powerhouse from a position it had occupied for two decades.
In January, 15% of all exports to the United States came from Mexico, which ships a range of products to its USMCA trade partner including cars, auto parts, electronics, crude oil, alcoholic beverages and agricultural products.
The total value of those exports easily exceeded the value of Mexico’s imports from the U.S. in January. United States exports to Mexico were worth $26.48 billion, down slightly from a year earlier, leaving Mexico with a trade surplus of $11.56 billion with the U.S. in the first month of 2024. Mexico’s surplus in January was just over 15% higher than it was in the same month of last year.
In 2023, Mexico was the United States largest trade partner for the first time in four years, dislodging Canada from the position it occupied in 2022.
Mexico’s exports to the U.S. were worth $475.6 billion last year, a 4.6% increase compared to 2022, while two-way trade totaled $798.8 billion, up 2.5% compared to the previous year.
Mexico’s exports to the United States and the rest of the world are expected to continue increasing in coming years as more and more foreign manufacturing companies establish a presence here, including firms from China seeking to circumvent U.S. tariffs on Chinese-made goods.
With reports from Reforma and El Financiero
It’s great to see the year starting off strong for Mexican exports.
Regardless of politics in the immediate term for either country it is these figures that will have the biggest impact on Mexico. As long as trade is strong like it is now, Mexico and Mexicans can weather the storm, I think
Inflation has raised the cost of goods everywhere and the USD:Peso conversion has increased the valuation of Mexican goods in terms of USD.
If Mexico had done nothing new over last year, this would have gone up more than 1% just from those two factors.
A strong peso means that it costs more to buy Mexican goods, so less are purchased.
China is currently having its own difficulties having said that where does tax revenue go in Mexico? We certainly are not seeing the infrastructure boom China has. Of course I am aware China has 12 times as many people as Mexico so not expecting the same results. But Mexico needs some catch up.
There’s several important caveats here:
First, Mexico’s #1 trade partner is a social, moral, political and fiscal disaster in the making. Countless Banana Republics in history have shown that wanton borrowing and money printing the likes of what has gone on in the U.S. over decades always ends up in runaway inflation and fiscal collapse. Corrupt elections and corrupt governments do not a bright future make.
The U.S. is not a good long term customer for Mexico and the country is doing very little if anything to recognize this danger and diversify its customer base. The old adage used to be, “When the U.S. sneezes, Mexico catches a cold.”
Now, it is inevitable the coming economic and social implosion north of the border would put Mexico into an all out economic depression and make it vulnerable to a full takeover by criminal gangs Haiti style. Mexico’s dependency on a failing country for so much of its export market is fiscal Russian roulette.
Secondly, Mexico needs to keep China at arms length and use that protectionism that is misdirected against the U.S. against China and Mexico’s large trade deficit with that country. It buys far more from a China that is no friend to anyone other than itself and a blatant user of trade for political gain, and it doesn’t buy near enough from the U.S. to have a more balanced and sustainable longer term trading relationship.
The goods and services protectionism of Mexico at the U.S. border is bad for both countries and needs to be relaxed and mostly eliminated. Mexico can well afford to import more from the U.S., lowering costs here and supporting its best customer better. Mexican consumers would be the direct beneficiaries of this.
The economic power of the future is not the U.S. It is Eastern Europe, Russia, some parts of Africa and Asia. As a matter of policy it should be Mexico’s number one priority to greatly expand those markets in places where population is young and economic activity is growing rapidly.
One final comment: A strong modern economy requires far better transport and utility infrastructure than Mexico has. For the most part, the roads here are primitive, totally inadequate for the 83 percent of trade that is already shipped by truck. It is no better than a patchwork of highly variable quality state and local roads and hit and miss quality but always highly priced private toll roads.
Mexico needs to emulate Eisenhower’s solution to the same problem in the U.S and it needs to recognize some things are better done by government and get the profiteers out of the road system.
Along with that far more effort is needed in the energy, water supply and environmental clean up areas. These things are always a high priority in the truly developed world for a very good reason. They are vital to a modern economy.
Mexico’s potential is great because of its young, energetic and increasingly better educated population, its energy resources and its gradually improving political climate. To capitalize on all of this it must focus on the countries with similar qualities and rising prospects for the trade partners of the future. It must prepare itself for that future with far better infrastructure and fostering a strong domestic economy and prosperity.
Good thoughts Daniel. Unfortunately most of us have been hearing about the end of the US and US dollar for 30 years. In the meantime all those people are 30 years older, made bad investments based on that advice and are still working. For the majority the strength of the US economy is how we retired young. If the US goes Mexico will fall even harder.
Someday the mighty United States may fall but if you are over 55 none of that matters. You better start living your life today.