Asian businessmen expect $ 1.6 billion in sales
More than 1,600 certified companies in China, the largest delegation in Latin America, will arrive in Mexico next week and expect to generate sales of more than $ 1.6 billion in just three days.
Asian companies will come to Mexico City to participate in the China HomeLife exhibition, an exhibition of manufactured products -machinery, intermediate goods, textiles, and toys- in that country.
The vice president of the Mexico-China Chamber of Commerce, Jorge Morones, said that this space shows interest in the Mexican market in the face of the trade war that the Asian giant is experiencing with the United States.
” China sells us 11 times more than what we sell to them, ” said Morones, detailing that 70 percent of imports are inputs, parts and components and machinery used in the production plant in Mexico and then converted into products of export to other parts of the world.
The trade balance between the two countries amounted to 83 thousand 673 million dollars in 2018, a growth of 3.48 percent over the previous year, and the trade deficit for Mexico is 70 thousand 90 million dollars.
Mexico imports more than 54 billion dollars a year of machinery and intermediate goods for the country’s manufacturing industry, with annual growth of between 3.0 and 5.0 percent.
Enrique Dussel Peters , specialist of the China-Mexico Studies Center of the Faculty of Economics of the National Autonomous University of Mexico (UNAM), said that Mexico can play a critical role in the current commercial war.
He added that this situation will depend on the work of the Mexican government and business organizations to attract more investment and encourage Mexican exports to that market.
Mexico is the United States’ top trade partner. At least for the moment.
Mexico traditionally ranks third among U.S. trade partners, behind China and Canada.
This realignment shines a slightly brighter light on the essentially dormant U.S.-Mexico-Canada Agreement, which House Speaker Nancy Pelosi has bottled up in Congress, and President Trump’s since-retracted threat to close the U.S.-Mexico border over illegal immigration and drug issues.
Granted, the data is only through February. But it is the most recent data available from the U.S. Census Bureau, which is still playing catch-up from the month-long government shutdown.
Through February, U.S. trade with Mexico has increased a relatively modest 3.36% while trade with current No. 2 Canada is down 4.12% and No. 3 China is down 13.52 percent.
(As I noted in a previous post, the impact of the U.S.-China trade war has taken root: China’s trade in January fell at the fastest rate in 17 years, exports and imports.)
These top three trade partners routinely account for about 45% of all U.S. trade with the world, with the remaining 55% spread among more than 200 nations.
On an annual basis, China has ranked as the United States’ top trade partner the last four years, since passing Canada in 2015. The change occurred not because of a glut of inexpensive imports from China but because of the steep decline in the price of oil — Canada is far and away the largest supplier of foreign oil. Prior to 2015, Canada had ranked as the United States’ top trade partner for decades. Until 2005, Mexico was the No. 2-ranked trade partner, behind Canada. In 2006, China first passed Mexico.
So, even if it lasts only a month or two, Mexico can now lay claim to having ranked as the United States’ top trade partner.
Here’s a little more detail on what happening with each of the three.
U.S. exports to Mexico have increased slightly, up 0.23%, while imports from Mexico increased 5.87%. On the export side, the drag was with the top U.S. export, gasoline and other fuels, which declined 4.73%. On the import side, the top import, motor vehicles, increased 13.93%.
While the border crossing at Laredo in Texas routinely accounts for 37% of all U.S.-Mexico trade, the bigger gains in 2019 have been Otay Mesa, south of San Diego, where trade is up 10.85% and Santa Teresa, New Mexico, where trade is up 27.45%. All of these gateways routinely do more than 95% of their trade with Mexico, not surprisingly.
With Canada, the story is still about U.S. oil and it’s also about motor vehicle imports. In 2018, those two import categories accounted for one-third of the value of all imports. Through February, the value of oil imports from Canada are down 28.70% while the motor vehicles are off 18.07%. Those two categories now account for slightly more than one-quarter of the value of all imports.
Trade across the Ambassador Bridge, which connects Windsor in Canada with Detroit in the Untied States, is off 7.37%. It and the nearby Port Huron Blue Water Bridge, where trade increased 1.04%, are accounting for 36% of U.S.-Canada this year, 22% over the Ambassador Bridge.
Then there’s China. Through February, U.S. exports are down 20.74% while U.S. imports are down 10.65%.
On the U.S. export side of the ledger, well-publicized soybeans are off 39.65%, entangled in the U.S.-China trade war, and motor vehicles are down 7.07%, somewhat ensnared in the U.S.-imposed steel tariffs. On the other side of the ledger, U.S. imports of cell phones and related equipment are off a somewhat stunning 29.70%, from $10.98 billion to $7.72 billion. Computers and monitors dropped 14.07% and furniture declined 18.91%.
The Port of Los Angeles accounted for 25% of all U.S.-China trade, up from 23% last year even though trade is off 9.41%. That’s because trade at Chicago’s O’Hare is off 13.51% and the Port of Los Beach, 20.68%.
U.S.- Mexico Trade War will further shut out American producers
What’s likely to happen from here?
Source: Forbes, heraldodemexico
