China displaced Mexico as the first partner in the trade of United States products in 2020, in a context in which the Chinese were affected by tariffs in that bilateral relationship and the Mexicans had a greater comparative impact due to the Covid-19 pandemic. .
For the first time in that classification, Mexico ranked first in 2019, after China will overtake Canada in 2015 and remain the leader for the next three years.
Mexico’s main advantage is its proximity to the US market and a favorable outlook with the trends of offshoring (nearshore) and internal contracting (inshoring), given the high integration of its industrial value chains with the United States.
Offshoring is a type of subcontracting of an activity with lower wages than in the country itself, which is relatively close in the distance; while internal hiring consists of a process of reversing an external hiring.
But nevertheless, Mexico had a 14.3% share of the total of goods exchanged with the United States in 2020, a reduction compared to its historical maximum reached a year earlier, of 14.8 percent.
In a disaggregated manner, from 2019 to 2020, Mexico’s share of total US imports of goods decreased from 14.3 to 13.9%, while its share as a destination in total US exports decreased from 15.6 to 14.9 percent .
China’s trend in the US market was notably influenced by the policies of former US President Donald Trump, who fueled a trade war between the two countries.
In 2016, the year before the start of the Trump Administration, China’s share of the United States’ total product trade was 15.9% (decreased to 14.9% in 2020), while its share in US exports increased from 8 to 8.7% and its share in US purchases fell from 21.1 to 18.6% in the same comparison.
Under the argument of concerns about China’s policies on intellectual property, technology and innovation, among others, Trump implemented several rounds of tariff increases and defined himself as “the tariff man” (“Tariff Man”).
In 2016, the United States’ merchandise trade deficit with China totaled $ 347 billion and, four years later, this indicator dropped to $ 310.8 billion.
Compared to China, the world’s largest exporter of products, Mexico has another advantage, the Treaty between Mexico, the United States and Canada (T-MEC), which entered into force in July 2020 and maintains, like its predecessor ( NAFTA), trade in goods without tariffs in the region.
In 2020, merchandise exports from Mexico to its northern neighbor totaled 325,394 million dollars, a year-on-year decrease of 9.1%, with a surplus in its bilateral balance of 112.700 million dollars (the second largest deficit in the United States, considering countries individually).
For their part, Chinese exports to the same market registered a decrease of 3.6% year-on-year in 2020, to 435,449 million dollars, maintaining the largest negative balance for the United States.
From around the world, US foreign purchases of goods were for $ 2.336.579 billion, a year-on-year decline of 6.4 percent.
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