Is ‘Made In Mexico’ About To Replace ‘Made In China’ On Many US Goods?

Despite once dominating the sector, there are some serious concerns about China’s manufacturing and exporting industries. While the country still makes a lot of stuff that other countries need, it is struggling to find workers, faces serious scrutiny about labor conditions, and is just generally seen as a risky trading partner for many other nations … including the United States.

Filling the gap

Another logistical issue in the post-pandemic era involves the supply chain disruptions that have stymied international trade in recent years. And while China is on the other side of the world, America has a much more attractive alternative on the other side of its southern border.

That’s why Mexico has now become the top U.S. trade partner as of the first four months of this year. After years of China ranking at the top of the list, it’s currently in third place — behind Mexico and Canada, America’s neighbor to the north.

Here are a few stats to show how much things have changed:

• Trade with Mexico topped $263 billion between January and April.
• More than 15% of U.S. imports and exports involved Mexico.
• China’s share amounted to just 12% during the same period.

Planting the seeds

While the pandemic and economic uncertainty in China seem to have accelerated its decline as America’s top trading partner, experts say the wheels were in motion well before COVID-19 ever surfaced.

Former President Donald Trump not only imposed higher tariffs on certain Chinese imports, but he ushered in the passage of the U.S.-Canada-Mexico trade deal that superseded the existing NAFTA agreement.

In the end, proximity is key. That's why components in Mexico’s exports to the U.S. are 10 times more likely to qualify as “U.S. made” than those in products from China.

Chris Agee August 21st, 2023

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