USA-China Conflict will favor Mexico

Mexico and China are the main suppliers of manufactured products imported into the United States.

he trade war between the United States and China opens a window of opportunity for exporters, especially Mexicans who are direct competitors of China in the United States (US) import market.

“Given the strong similarity between what was exported by Mexico and China, and the important comparative advantages that Mexican exporters have developed under the international trade model in the light of the old NAFTA, we believe that the recent trade war between the US and China opens a window of opportunity for Mexican exporters , “said Citibanamex.

According to the institution, the market potential for Mexican products is significant and amounts to 125 billion dollars, taking into account the effective trade competition between Mexico and China in the US import market. The amount represents half the value of the goods affected by the tariffs to China.

“In addition, we identified that 100 billion dollars have a high additional market potential for Mexican products,” said the specialists, under the assumption that China is not capable of absorbing the impact of tariffs, and, therefore, of reducing your prices.

Mexico and China are the main suppliers of manufactured products imported into the United States , as both countries have strengthened their position with market shares: China with 22 percent and Mexico with 13 percent, that is, more than a third of imports total of the United States.

“Given the strong similarity between what was exported by Mexico and China, and the important comparative advantages that Mexican exporters have developed under the international trade model in the light of the old NAFTA, we consider that the recent trade war between the United States and China, It opens a window of opportunity for Mexican exporters, “said Citibanamex.

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Source: El Financiero, Bloomberg

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