How Mexico Became America’s Biggest Trade Partner Last Year

By: Anneken Tappe · February 12, 2024 · Reading Time: 3 minutes

Made in Mexico

The U.S. is the largest importer in the world, buying more than $3 trillion in goods every year. But the trade wars of recent years are showing up in its roster of partners.

The U.S. trade deficit shrank by nearly 19% in 2023, according to the Bureau of Economic Analysis . Make no mistake, the deficit, which occurs if a country imports more than it exports, was still pretty sizable at $773.4 billion. But importantly, the order of America’s biggest trade partners shuffled around, putting Mexico at the top of the list.

Trading Places

Mexico became the nation’s leading source for import goods in early 2023, replacing China for the first time in more than two decades.

And yes, these imports encompass far more than your favorite green, pitted fruit, as Mexico has benefited from an attempt to rely less on Chinese factories. The U.S. imported nearly half a trillion worth of goods from its Southern neighbor in 2023, while, goods imports from China decreased by more than $109 billion last year. Vehicles and parts, as well as electrical equipment and computers are among the biggest exports from Mexico to the U.S.

Changing Tides

Trade ties between the U.S. and China have been tenuous for the past years as ongoing trade wars and a push to ensure greater supply chain resilience after the pandemic make their mark.

Meanwhile, Mexico has steadily grown its economic relationship with Washington. USMCA, the North American trade deal that replaced NAFTA in 2020, has helped make Mexico particularly compelling for corporations rethinking where they want to manufacture products.

That said, China remains the largest exporter of goods in the world, and a key trading partner to the U.S. But one thing is for sure, Washington is diversifying.

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