With AMLO, Mexico became the US’s main trading partner

During the administration of President Andrés Manuel López Obrador (AMLO), for the first time in history, Mexico became and consolidated itself as the main trading partner of the United States, the largest economic power in the world. However, specialists say, in the near future there are still important challenges, for example, defining the relationship with another global giant, China, and the review of the USMCA, an instrument that strengthened the relationship.

In the first quarter of 2019, after more than 25 years of bilateral relationship (First with the North American Free Trade Agreement and then with the Mexico, United States and Canada Agreement), Mexico occupied the position of main partner for the first time. US trade –measured by the sum of the value of exports and imports–, a place that China and Canada disputed throughout that time.

In the accumulated year of that year, after three years of Chinese dominance, data from the Census Bureau of the United States Department of Commerce reveal, Mexico closed as the largest trading partner; However, the dispute with Canada went to the end, since for six months in 2019 the country of the maple leaf occupied the position.

Mexico’s escalation, more than a new trade model, was the product of the trade war between the United States and China, triggered by the then US president Donald Trump, who through strong tariffs caused a significant contraction in merchandise traffic between both economies. , resulting in the Asian giant falling to third position in 2019.

However, the effect was momentary and by 2020, in the midst of the Covid-19 pandemic, China regained the number one spot. As the trade war between both countries escalated, the great beneficiary was Canada, which during 2021 and 2022 was the country with which the United States had the greatest commercial relationship.

During this period, despite being surpassed by Canada, Mexico had been significantly increasing its relationship with the United States. Data from the Census Bureau reveal that in 2019, trade between both nations amounted to 614,500 million dollars, while in 2022 it closed at 779,308 million dollars, an increase of 27 percent.

However, Enrique Dussel Peters, coordinator of the China-Mexico Studies Center (Cechimex) of the National Autonomous University of Mexico, pointed out at the time, when reviewing only the value of the exports carried out by Mexico and China to US territory, the difference remained being huge in favor of the Asian giant.

Destination of 83.3% of exports

In 2023, according to data from the Census Bureau, Mexico was ranked for the second time since records began (the first was in 2019) as the main trading partner – measured by the sum of exports and imports – of the United States when exchanging merchandise for 798 billion dollars.

This sum, unprecedented for a year, which also grew 3 percent compared to the amount in 2022, represented 5.7 percent of total US trade.

However, Mexico not only became the largest partner of the United States, but with exports worth 476.6 billion dollars, it also positioned itself as the largest supplier to the main world economy, a place that China had occupied during the last 20 years, but was lost due to the trade dispute.

In this regard, BBVA analysts estimated that in 2023, the United States absorbed 83.3 percent of Mexican exports, leaving Canada and China far behind with only 3.1 and 1.7 percent, respectively. In addition, they noted, the amount of sales to the US increased 3.7 percent and to Canada 15.5 percent; so that North America increased its commercial relevance for Mexico, confirming regional consolidation in the face of global uncertainty.

However, Monex analysts pointed out, although the country presents a leadership in terms of imports from the United States “in a large momentum for him nearshoring”, important commercial-economic risks persist, especially if Donald Trump materializes his second term in the US presidency.

They highlighted that there may be sanctions in the face of allegations that China is evading tariffs by installing manufacturing processes in Mexico and sending products to the US, specifically in the steel, aluminum or automotive sectors. Another risk is the review of the T-MEC for 2026, when Trump could politically talk about a new renegotiation due to the context of China.