{"id":16112,"date":"2019-05-24T13:08:06","date_gmt":"2019-05-24T17:08:06","guid":{"rendered":"https:\/\/www.datamyne.com\/?p=16112"},"modified":"2022-05-03T12:00:39","modified_gmt":"2022-05-03T16:00:39","slug":"the-top-u-s-trade-partner-is-now-mexico","status":"publish","type":"post","link":"https:\/\/www.datamyne.com\/knowledge-center\/markets\/the-top-u-s-trade-partner-is-now-mexico\/","title":{"rendered":"The Top U.S. Trade Partner is Now Mexico"},"content":{"rendered":"

Mexico, steadily rising in rank to No. 12 among exporting nations, has eclipsed China and Canada to become the U.S.\u2019s leading trade partner.<\/h3>\n

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Mexico is now the top U.S. trade partner, ranked by total value of import and export trade, according to Descartes Datamyne’s U.S. Census data for January through March 2019, as summarized in this table:<\/p>\n

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Perennial top U.S. trade partner China has fallen to third place behind the U.S.\u2019s fellow members in the North American Free Trade Agreement (NAFTA). This stunning change in trade relations is largely (but not solely) the result of the U.S.-China trade war, which has just flared up again. After calling at truce last December<\/a>, the U.S. on May 10 went ahead with a pending boost in tariffs from 10% to 25% on $200 billion in Chinese goods<\/a>. China quickly countered with retaliatory tariffs<\/a>.<\/p>\n

But there is more at work here than the damage done by the trade war. The latest ranking confirms a second, long-building trend: Mexico\u2019s steady rise as an exporter.<\/p>\n

Mexico is now among the world\u2019s top dozen exporting nations, ranked by value of trade in 2018, moving past North American trading partner Canada, Russia and Singapore in the last five years. As the 5-year trade data from UNCTAD (summarized in the table) shows, Mexico\u2019s rise in the rankings is the result of gains in export sales as the UK, Russia, Canada and Belgium saw exports decline.<\/p>\n

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Mexico achieved near parity with Canada as country of origin for U.S. imports in 2015, and has led Canada since 2016, as the graph illustrates:<\/p>\n

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Top U.S. Trade Partner: Mexico\u2019s Exports Driven by Oil and Automobiles<\/h2>\n

A closer look at Descartes Datamyne\u2019s Mexican trade data reveals that Mexico has capitalized on its NAFTA-defined partnership with the U.S. to build exports. Over the last five years, about 80% of Mexican exports have shipped to U.S. markets. Only in 2018 has the U.S. share slipped to 76%.<\/p>\n

The Mexican data also makes clear that petroleum and motor vehicles are the drivers of its export trade. The shale revolution and resulting declines in demand and in oil prices have whittled petroleum\u2019s share of this trade. These pie charts show Mexico\u2019s lessening dependence on petroleum as an export, while passenger vehicles, trucks and automotive parts have gained.<\/p>\n

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By comparison, Descartes Datamyne Canadian trade data indicates petroleum has continued to command a leading share of Canadian exports — 18.6% in 2014 and 14.9% in 2018 \u2013 accounting for much of the recent lag in Canada\u2019s exports as Mexico\u2019s have advanced.<\/p>\n

Here\u2019s a more detailed look at Mexico\u2019s top 10 exports at the 6-digit HS code level in 2008 compared with 2018:<\/p>\n

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Leading losses among Mexico\u2019s exports to the U.S. over the last decade were color TVs (-48.3%), parts for telecoms (-47.2%), petroleum products (-46.5%), and crude oil (-39.2%). The most spectacular gain \u2013 1.7 million% \u2013 was posted by cars with an engine cylinder capacity of 1000cc to 1500cc \u2013 a.k.a., a 1.0- to 1.5-liter engine \u2013 moving up in rank from No. 50 in 2008 to No. 7 in 2018. Other motor vehicles made triple-digit gains. Exports of electronics products also increased significantly, led by digital processing units (up 635.5%) and \u201creceivers\/transmitters for voice, image, data,\u201d a product category that includes modems, (290%).<\/p>\n

Top U.S. Trade Partner: USMCA Rewrites the Rules on Auto Exports<\/h2>\n

Given the role of motor vehicles in North American trade, it\u2019s no surprise that some of the biggest changes in the renegotiated NAFTA \u2013 designated the U.S.-Mexico-Canada Agreement, or USMCA \u2013 center on automobiles:<\/p>\n