Mexico dethrones China after 16 years of dominance in exports to the US

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Mexico became for the first time the largest exporter of products to the United States in 2023, after 16 years of China’s dominance in that position.

With the accumulated data until November that the Census Bureau released on Tuesday, Mexico trendily secured the first position of that indicator.

In the first 11 months of 2023, Mexican exports grew 4.8% year-on-year, reaching 438,986 million dollars.

On the other hand, shipments from China to that market totaled 393,137 million dollars, a year-on-year drop of 21.2 percent.

Occupying the third place, Canada exported goods to its southern neighbor for 387,727 million dollars, a decrease of 4% year-on-year.

In addition, Allianz Group, a German multinational financial services company, highlighted that China lost its place as the largest trading partner of the United States against Mexico.

“In the midst of this reorganization of trade and investment patterns, several emerging economies can benefit, and the first benefits will be enjoyed by the economies that remain very close to the United States, both in terms of physical and geopolitical distance,” Allianz said in a report.

Indeed, from January to November 2023, Mexico covered 15.8% of the total trade flows (imports plus exports of products) of the US economy, followed by Canada (15.2%) and China (11.3 percent).

The advantage of Mexico was also observed considering only last November, when Mexican shipments headed to the United States grew 8.1%, to 39,810 million dollars.

That was a better result than the one obtained by Canada, with a growth of 7% (36,141 million dollars), as well as the one registered by China, with a decrease of 3.8% (35,495 million).

In favor of Mexico plays the relocation (nearshoring), which consists of the practice of outsourcing processes or commercial services to a nearby country. Against China weighs the trade war it maintains with the United States, in addition to the fact that in 2023 the resurgence of Covid-19 cases affected its economy.

After displacing Canada in 2007, China dominated the US market for its competitive costs, the development of its infrastructure, the scale of its economy, its integration into global value chains, its technological advances, the size of its domestic market and the particularity of competing in international free trade with a planned economy, among other factors.

Conversely, Mexico kept unchanged its imports from the United States in the first 11 months of 2023, with an accumulated of 299,407 million dollars.

On the contrary, Canada registered a decrease in its purchases of US products (-0.9%, to 325,238 million dollars), the same as China (-3.3%, to 135,799 million).

US exports of goods to the whole world fell 2.4% from January to November last year, to 1 trillion 851,418 million dollars.

Source: El Economista