Mexico Broke Record Exports To The US Thanks To Trump's Trade Dispute With China

Mexican products now represent 14.4% of total imports in the United States, a record level for Mexican exports reached in the middle of the trade dispute between President Donald Trump and China.

According to data from the last report of the US Office of Commerce, Mexican exports to its northern neighbor registered a value of USD 240,738 million from January to August of this year, reflecting a growth of 5.5% at annual rate and USD 12,446 million more than the same period last year.

In contrast, during this period, US imports from China fell 12.5% ​​- the equivalent of USD 43,245 million – so they now represent only 18.1% of the total market share, with a value of USD 301.7 billion, according to the US government.


This phenomenon is explained because Mexico has been “the main beneficiary in absolute terms” of the commercial tensions between Washington and Beijing unleashed after Trump's arrival at the White House in 2017, according to economist Luis de la Calle, interviewed by the Spanish agency Efe.

"We are taking away participation from the Chinese economy in the last year," said De la Calle, who stressed that approximately the Asian nation has lost 2.6 percentage points of market share.

And Mexico has taken advantage of about 35% of that loss by China, said De la Calle, who helped negotiate the still-effective North American Free Trade Agreement (NAFTA), which entered into force in 1994 and was so controversial. It has caused in Mexico since then.

Trump was optimistic on Friday for reaching a "partial agreement" with China, meeting at the White House with Chinese Vice Premier Liu He and suspended his plan to raise tariffs by 25 to 30% next week to Chinese imports worth USD 250,000 million.

Even so, US officials clarified that the agreement is not final, so a tariff increase scheduled for December 15 is not ruled out. So far, the United States has imposed levies on Chinese imports worth USD 360,000 million, as part of its trade war with the Asian giant.

Given this escalation, the American Chamber of Commerce in Mexico (AmCham) emphasizes that Mexican products offer competitiveness to the United States, so opportunities are opened in alternatives such as wood, minerals and chemicals, and in manufacturing, as in non-electrical machinery , electronics and auto parts.

"Our integration has no turning back, so, beyond any international trade situation, Mexico is ready to attract more investment, boost its manufacturing and remain the best ally of the United States," Francisco Pontón, president of the AmCham Council, in its Monterrey chapter.

De la Calle considers that the delay in the entry into force of the new Treaty between Mexico, the United States and Canada (T-MEC), frozen in the US Congress and the Canadian Parliament, does not really affect trade.

This is because the trade agreement continues in force, and in fact, the T-MEC is actually a "95% of NAFTA". Meanwhile, AmCham forecasts that business opportunities will "potentially grow" after ratification.

“In this sense, to increase the role of Mexico as a supplier to the United States, the sum of efforts between the private initiative and the Government to strengthen trade channels and consolidate North America as the most competitive region in the world is key,” Pontón emphasized.

That is what the Mexican Ministry of Economy (SE) agrees, adding that, derived “largely” from Trump's trade policy with China, Mexico consolidated during the first nine months of the year as “the main trading partner” of States United, with an exchange equivalent to USD 414.2 billion.

"Under that view and as long as the commercial tension between the United States and China continues, Mexico is increasingly presented as an opportunity for entrepreneurs and investors of different nationalities, including from China, to access the US market from Mexico," said the SE.

Mexican President Andrés Manuel López Obrador was hopeful Friday that the T-MEC will be ratified in the US Congress this month.

And to generate pressure, this week he sent a letter to the president of the House of Representatives of the United States, Nancy Pelosi, in addition to meeting with legislators from that country.



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