Saturday, July 20, 2024

Mexico’s exports to the US hit an all-time high in May

Mexico’s revenue from exports to the United States hit an all-time high in May, increasing 6.1% in annual terms to almost US $44 billion.

United States government data also shows that Mexico has consolidated its position as the world’s top exporter to the U.S.

The value of Mexican exports to the United States increased 6.2% in the first five months of the year, while China — which Mexico surpassed last year to become the No. 1 exporter to the U.S. — lost ground.

A record-breaking May 

Data published by the U.S. Census Bureau and the U.S. Bureau of Economic Analysis on Wednesday shows that Mexican exports to the U.S. were worth $43.88 billion in May, the highest monthly amount on record.

Mexico’s export revenue increased 1.9% compared to April, breaking the previous $43.06 billion record set that month.

While the value of Mexico’s exports to the U.S. increased 6.1% annually in May, the second and third largest exporters to the world’s largest economy both saw their revenue decline.

Exports at the Manzanillo port
Mexico’s exports to the U.S. were worth over US $200 billion in the first five months of the year. (Lloyds)

Canada shipped goods worth $35.66 billion to its southern neighbor in May, a 2.5% decline compared to the same month last year.

China’s exports to the U.S. were worth $35.03 billion in May, a 2.3% decline compared to a year earlier.

Mexico had a 15.9% share of the United States’ market for imports in May, ahead of Canada on 13% and China on 12.7%.

Mexican exports to the U.S. exceeded $200 billion between January and May 

Mexico shipped products worth $206.79 billion to the United States in the first five months of the year, a record for the period.

Agricultural produce is among Mexico’s largest exports – including avocados. (Cuartoscuro)

The value of Mexico’s exports to its neighbor increased every month this year compared to the previous month. Vehicles, electronic goods including computers and crude oil were among Mexico’s biggest export revenue earners. Exports generate around 40% of Mexico’s total GDP.

The value of Canadian and Chinese exports to the U.S. declined on an annual basis in the first five months of the year.

Canadian exports were worth $171.45 billion between January and May, a 1.2% decline compared to the same period last year. Chinese exports to the U.S. fell 2.5% to $164.29 billion.

Mexico had a 15.9% share of the United States’ $1.3 trillion import market in the first five months of the year, ahead of Canada on 13.2% and China on 12.6%.

In 2023, Mexico’s share of the U.S. import market was 15.4%, ahead of China on 13.9% and Canada on 13.7%.

Mexico has thus increased its share of the market by 0.5 points this year, while Canada’s share has decreased by 0.5 points and China’s share has declined 1.3 points.

cars
One of Mexico’s top sources of export revenue is cars and car parts. (File photo)

Mexico’s “lead” over Canada in terms of market share has increased from 1.7 points in 2023 to 2.7 points this year, while its advantage over China has increased to 3.3 points from 1.5 points in 2023.

Mexico has benefited from a “decoupling” of the world’s two largest economies amid the ongoing China-United States trade war, as well as the relocation of foreign companies here as part of the nearshoring trend.

It also benefits from the USMCA free trade pact, which superseded NAFTA in 2020. Mexico, the United States and Canada are scheduled to review the agreement in 2026.

Mexico remains the United States’ top trade partner  

Trade between Mexico and the United States totaled $345.45 billion in the first five months of the year, according to the U.S. government data.

That amount is 8.6% higher than the $317.96 billion in trade between the United States and Canada, which was the No. 2 trade partner of the U.S. between January and May.

In 2023, Mexico dislodged Canada as the United States’ largest trade partner after Canada claimed the top spot in 2022.

Infographic: U.S. Trade With Mexico Surges to No. 1 Position | StatistaMexico became the top trade partner of the U.S. in 2023, and has continued the trend in 2024. (Infographic by Statista)

Mexican exports to the United States — worth $206.79 billion between January and May — accounted for just under 60% of trade Mexico-U.S. trade in the first five months of the year.

U.S. exports to Mexico — worth $138.65 billion between January and May — accounted for just over 40% of two-way trade. U.S. exports to Mexico include refined fuel, auto parts and consumer goods.

Mexico had a trade surplus of $68.14 billion with the United States in the first five months of 2024.

NAFTA altered the trade balance between Mexico and the U.S.  

The El Economista newspaper reported Wednesday that the United States had a US $1.7 billion trade surplus with Mexico in 1993, the year before NAFTA took effect.

In the period after the free trade came into force, the growth of Mexico’s exports to the United States outpaced the growth of U.S. exports to Mexico.

In 2023, the United States had a trade deficit of more than $152 billion with Mexico, and it is on track to record another sizable deficit this year.

Replaced by the USMCA on July 1, 2020, NAFTA had a profound impact on the Mexican economy during its 26-year lifespan — both good and bad, depending on who you ask.

The value of Mexico’s exports to the U.S. has increased exponentially since NAFTA took effect, and reached $475.6 billion in 2023.

The economies of the three North American trade partners have become highly integrated over the past 30 years. One of the most integrated sectors is the automotive industry, with automakers in the three countries frequently using auto parts made in one of the other USMCA nations.

With reports from El Economista and El Financiero

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