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Mexico Triumphs Over China: Becomes Top Source of US Imports
For the first time in more than two decades, Mexico last year surpassed China as the leading source of goods imported by the United States. This shift reflects the growing tensions between Washington and Beijing as well as U.S. efforts to import from countries that are friendlier and closer to home.
Figures released Wednesday by the U.S. Commerce Department show that the value of goods imported by the United States from Mexico rose nearly 5% from 2022 to 2023, to more than $475 billion. At the same time, the value of Chinese imports tumbled 20% to $427 billion.
The last time that Mexican goods imported by the United States exceeded the value of China’s imports was in 2002.
Economic relations between the United States and China have severely deteriorated in recent years as Beijing has fought aggressively on trade and made ominous military gestures in the Far East.
The Trump administration initiated tariffs on Chinese imports in 2018, alleging violations of global trade rules by Beijing. President Joe Biden maintained these tariffs upon taking office in 2021, signaling a rare bipartisan agreement on antagonism towards China.
Mexico has reaped benefits from the shift away from dependence on Chinese factories, facilitated by the 3-year-old U.S.-Mexico-Canada Trade Agreement allowing duty-free trade in North America. However, the situation is nuanced, as some Chinese manufacturers have established factories in Mexico to capitalize on these trade benefits.
Mexican President Andrés Manuel López Obrador emphasized the leverage gained through this trade status, suggesting it would deter the U.S. from closing the border to restrict immigration, a topic under negotiation in the U.S. Senate's border bill.
Industries, particularly auto manufacturers, have established plants on both sides of the border, creating interdependence for a consistent supply of parts.
Derek Scissors, a China specialist at the conservative American Enterprise Institute, highlighted substantial declines in politically sensitive categories like computers, electronics, chemicals, and pharmaceuticals in Chinese imports. He expressed skepticism about the U.S. comfortably accepting a rebound in these areas in 2024 and 2025, indicating that the China-Mexico shift in U.S. imports might not be a short-term trend.