Sunday, May 19, 2024

Mexico’s 2023 exports to the US on track to beat China

Mexico was the largest exporter of goods to the United States in the first 11 months of 2023, and data to be published later in 2024 will almost certainly show it ousted China from the top spot over the full calendar year for the first time in 16 years.

Data published Tuesday by the United States Census Bureau (USCB) also showed that Mexico was its northern neighbor’s largest trade partner between January and November, with two-way trade of close to US $740 billon. Mexico is set to dislodge Canada as the United States’ largest trade partner in 2023 after Canada claimed the top spot in 2022.

Kansas City Southern is looking for a 26% increase in speed this year.
Mexico is likely to displace Canada as the largest trading partner of the United States for 2023, as the economy picked up an impressive head of steam. (Kansas City Southern)

Mexico exported goods worth a record high of $438.98 billion to the U.S. between January and November, a 4.8% increase compared to the same period of 2022, according to USCB data.

Mexico’s export total was well ahead of that of second-ranked China, which sent goods worth $393.13 billion to the U.S. in the first 11 months of last year, an annual decline of 21.2%.

Canada was the third largest exporter of goods to the U.S., sending products worth $387.72 billion to its southern neighbor between January and November, a year-over-year decline of 4%.

Mexico’s exports to the United States – among which are cars, auto parts, computers, oil and agricultural products – rose last year as investment poured into its manufacturing sector as part of the growing nearshoring phenomenon, while China’s exports declined amid its ongoing trade war with the U.S.

Mexico looks set to outstrip China as 2023’s biggest exporter to the United States – thanks in part to Chinese and other foreign direct investment in the country. (Bernd Dittich/Unsplash)

Mexico also benefits from the USMCA free trade agreement with the United States and Canada.

Chinese investment is growing in Mexico, in large part because Mexico gives the world’s second largest economy “a back door” into the United States as it is party to the USMCA, The Economist reported last year.

The presence of Chinese companies in Mexico, especially auto ones, is a growing concern in the United States.

Mexico and the United States last month struck an agreement to cooperate on foreign investment screening as a measure to better protect the national security of both countries. The plan appeared to be motivated to a large degree by a desire to stop Chinese investment in Mexico that is considered problematic.

A record November

Mexican exports to the U.S. were worth $39.81 billion in November, an 8.1% increase compared to the same month of 2022. The total was the highest ever for Mexican exports to the United States in the month of November.

The year-over-year increase in percentage terms was the highest for Mexico in nine months, after a 9.1% gain was recorded last February.

Avocado exports
Agricultural products, such as avocados, are among the most lucrative exports to the U.S. (Juan José Estrada Serafín/Cuartoscuro)

Mexico is still the United States’ top trade partner 

USCB data showed that Mexico remains in the coveted position of leading trade partner of the world’s largest economy, after seizing the top spot from Canada earlier in the year.

Mexico’s imports from the United States were worth $299.4 billion in the first 11 months of 2023, a figure virtually changed from the same period of 2022.

Two-way trade between Mexico and the United States was thus $738.39 billion, a 2.8% increase compared to the January-November period of 2023.

Trade between the two countries accounted for 15.8% of the United States’ exports to and imports from all countries.

Canada ranked as the second largest trade partner of the United States in the first 11 months of last year, while China ranked third. Two-way trade between Mexico and the United States was $25.4 billion higher than that between the U.S. and Canada and $209.45 billion higher than that between the U.S. and China.

In 2022, Mexico was the United States’ second largest trade partner after Canada, but it appears likely it will dethrone its USMCA partner when final 2023 data is published.

Mexico records a healthy trade surplus

Mexico’s surplus with its northern neighbor in the first 11 months of last year was a record high $139.57 billion, a 17% increase compared to the same period of 2022.

Mexico’s trade surplus with the U.S. in November was $13.81 billion.

With reports from El Economista, El Financiero, Reforma and El País 

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