Mexico supersedes China as the U.S. largest trading partner

In the midst of its trade war, the exchange with the Asian country plummeted 14.2% from January to April and grew 3.3% with Mexico; even Canada surpassed the eastern power, which was in third place among the largest US partners.

Mexico, in the first position, and Canada, in the second, displaced China as the largest US partners in theproduct trade during the first four months of 2019.

This change in classification occurs while discussing the ratification of the Treaty between Mexico, the United States and Canada (USMCA) in the legislative powers of the three countries, while a trade war between the United States and China remains.

While this trade war has been going on , Mexico has gained more participation in the US market compared to Canada and, in general, compared to the average of the rest of the other external suppliers.

From January to April, the trade of products (exports and imports) between Mexico and the United States totaled 203,180 million dollars and that of Canada-United States totaled 198,619 million dollars.

With an inverse trend, China had a merchandise trade with the United States of 174.664 million dollars in the first four months of the current year.

With a galloping commercial strength in the last two decades, China was placed in 2018 as the largest trading partner of the United States , displacing Canada since 2015 and taking Mexico in third place during that period.

Juan Antonio Dorantes, a specialist in foreign trade of the firm of Aguilera & Loera, said that the supply of Mexico in the US market has been consolidated by its comparative advantages, such as geography, labor and the diversity of goods and services that They can replace imports originating in China.

Under the guise of concerns over China’s policies on intellectual property, technology and innovation , President Donald Trump’s Administration has implemented three rounds of tariff increases in a total of 250 billion dollars in Chinese products, while China has raised the tariffs in 110,000 million dollars in products of the United States.

In addition, Trump ordered the United States Trade Representative (USTR) to begin the process of increasing tariffs to 25% on almost all remaining US imports from China (except rare earth materials, mineral pharmaceuticals). critical, certain pharmaceutical inputs and certain medical products), valued at 300,000 million dollars.

In its latest counterattack, China imposed tariffs of between 10 and 25% on a total of 5,410 products from the United States worth US $ 60,000 million annually, as of June 1, which already punishes the entire your purchases of American goods.

Dorantes noted that China, however, has maintained some export competitiveness in the US market, even with the setting of tariffs.

From another angle, Gerardo Traslosheros, former Ambassador of Mexico in New Zealand and exnegociador of the Agreement of Economic Association between Mexico and Japan, emphasized that Mexico has kept growing its commercial flows with the United States at a high cost.

“There is the sword of Damocles over Mexico,” he said, referring to the threat that Trump launched to increase tariffs in a generalized and gradual manner, from 5 to 25%, which would have begun on June 10, but dissipated temporarily after an agreement on immigration matters and, according to Trump, other bilateral matters agreed in secret and to be announced later.

Traslosheros said that the mere threat of Trump will have a negative impact on the investment attraction of the Mexican economy and said that the president of the United States will continue harassing Mexico in its attempt to re-elect itself.

Other analysts have considered that it is not easy to disintegrate the regional productive linkages. Many have shown that the North American Free Trade Agreement ( NAFTA ) helped US manufacturing industries, especially the automotive industry, to become more competitive worldwide through the development of supply chains.

Much of the increase in US trade with Mexico , for example, can be attributed to specialization, as manufacturing and assembly plants have been reoriented to take advantage of economies of scale.

As a result, supply chains have increasingly crossed national borders as manufacturing work is carried out where it is most efficient. According to experts, the North American automotive industry has “multilayer connections” between US and Mexican suppliers and assembly points.

Source: el economista

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