WASHINGTON (AP) — For the first time in more than 20 years, Mexico overtook China last year to become the leading source of imports to the United States. The change reflects growing tensions between the United States and China and the United States’ efforts to import from countries that are friendlier and closer to home.
Merchandise imports from Mexico to the United States rose nearly 5% from 2022 to 2023 to more than $475 billion, according to statistics released Wednesday by the U.S. Department of Commerce. At the same time, imports from China fell by 20% to $427 billion.
The last time the United States imported more Mexican goods than China was in 2002.
Economic relations between the United States and China have deteriorated significantly in recent years, as the Chinese government has aggressively fought trade and taken ominous military actions in the Far East. In 2018, the Trump administration began imposing tariffs on imports from China, claiming that China’s trade practices violate global trade rules.
President Joe Biden will keep those tariffs in place after he takes office in 2021, making hostility toward China a rare area of common ground for Democrats and Republicans.
As an alternative to offshoring production to China, which U.S. companies have long undertaken, the Biden administration will require companies to either seek suppliers in allies (“friendshoring”) or bring manufacturing back to the United States (“reshoring”). ). ). Supply chain disruptions related to the COVID-19 pandemic have also led American companies to seek supplies closer to the United States (“near-shoring”).
Mexico has benefited from a shift away from dependence on Chinese factories. However, this situation is more complicated than it seems. Some Chinese manufacturers are setting up factories in Mexico to take advantage of the three-year U.S.-Mexico-Canada trade agreement, which allows duty-free trade for many products in North America.
Overall, the United States’ global trade deficit – the difference between the value of what it sells and the value of what it buys abroad – shrank by 10% last year to $1.6 trillion.