CHINA DISPLACES MEXICO AS THE MAIN COMMERCIAL PARTNER OF PRODUCTS OF THE UNITED STATES

Despite the neighboring country's trade war with China, Mexican products had a greater negative comparative impact due to the coronavirus pandemic. Mexico ranked first in 2019. China overtook Canada as the United States' trade partner in 2015, and Asians remained the leader for the next three years.

The entry into force of the Agreement between Mexico, the United States and Canada (T-MEC) should change the position number 1 of China. Commercial advantages of Mexico over China Our country has as its main advantage its proximity to the North American market and a favorable outlook with the trends of offshoring (nearshore) and internal contracting (inshoring), as a consequence of the high integration of its industrial value chains with the United States. Offshoring is a kind of outsourcing of an activity, with lower wages than in the country itself, which is relatively close in the distance. Mexico had a 14.3% share in the total merchandise exchanged with the United States in 2020.

This represents a reduction compared to its historical maximum reached a year earlier, of 14.8%. From 2019 to 2020, total U.S. imports of goods to Mexico fell from 14.3 to 13.9%. On the other hand, the participation of the country as a destination in total US exports decreased from 15.6 to 14.9%. In 2020, Mexico's merchandise exports to the neighboring country to the north totaled 325 thousand 394 million dollars, a year-on-year decrease of 9.1%, with a surplus in its bilateral balance of 11 thousand 700 million dollars. The clashes during the Trump administration The US trade war in China was founded on the arguments of former US President Donald Trump about the policies of Asians on intellectual property, technology and innovation. For this reason, the Republican president implemented several rounds of tariff increases and defined himself as "the tariff man" ("Tariff Man"). Trade negotiations with China during this administration were harsh, and even so the Asian giant managed to become the main commercial ally of that nation. In 2016, the year before the start of the Trump administration, China's share of the United States' total product exchange was 15.9%. These figures decreased 14.9% in 2020, while their share of US exports increased from 8 to 8.7%. As for US purchases, the Chinese fell from 21.1 to 18.6%, in the same period. Foreign direct investment in figures In addition, the pandemic caused Foreign Direct Investment (FDI) flows to plummet 42% globally during 2020, according to data from the United Nations Conference on Trade and Development (UNCTAD). This global collapse hit the developed countries the hardest. In the case of Mexico, UNCTAD estimates an annual contraction of 8%, which places the country among the least affected nations. Meanwhile, China stood out as the largest recipient of FDI in the past year, with inflows of 163 billion dollars and a growth of 4%. Mexico was the member of the T-MEC that suffered the least: contractions in the United States were 49%, while Canada registered a drop of 39%.

Source: THE LOGISTICS WORLD via DGCI

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