Sunday, November 24, 2024

Mexico overtakes China to become the main source of imports to the US

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Last year, Mexico surpassed China as the leading source of imports to the United States for the first time in more than 20 years.

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.

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 is one of the countries benefiting from a move 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.

Derek Scissors, a China expert at the conservative American Enterprise Institute, said the biggest declines in imports from China were in computers, electronics, chemicals and pharmaceuticals, all politically sensitive categories. It pointed out.

“I don’t think the U.S. will be satisfied with the recovery in these areas in 2024 and 2025,” Scissors said, adding that the reversal in Chinese and Mexican imports to the U.S. “is a one-year temporary thing. We predicted that there was a high possibility that this would not be the case.

Scissors suggested that America’s reduced dependence on Chinese goods partly reflects wariness about China’s economic policies under President Xi Jinping. Mr. Xi’s strict coronavirus lockdown shut down large parts of China’s economy in 2022, and his officials raided foreign companies in apparent anti-espionage investigations.

“I think American companies have belatedly decided that Xi Jinping cannot be trusted,” he said.

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.



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