Mexico overtakes China as top importer to US

Imports and Exports | | MIC Customs Solutions |

Mexico overtakes China as top importer to US

Mexico has overtaken China to become the number one importer to the US for the first time in more than two decades, new figures have shown.

Data from the US Commerce Department revealed that the value of goods imported from its southern neighbor rose by five percent in 2023, reaching a total of more than $475 billion.

By contrast, imports from China over the same period fell to $427 billion - a drop of around 20 percent. This marks the first time since 2002 that the US has imported more goods from Mexico than China.

It has been suggested that this reflects a change in US economic policy to focus more on trade with partners that are more politically aligned with the US - referred to as 'friend-shoring' - as well as companies continuing to take advantage of the US-Mexico-Canada (USMCA) free trade pact. This is now three years old and allows for tariff-free imports of many products between the member nations.

The impact of additional costs on imports from China imposed by both the Joe Biden and Donald Trump administrations has also played a part. The New York Times highlighted research from the University of California, San Diego that found Chinese imports subject to duties  - such as screwdrivers and smoke detectors - have particularly suffered in recent years.

On the other hand, trade in items that do not attract tariffs, including hair dryers and microwave ovens, has continued to grow, albeit at a slower rate than exports from China to other countries.

Derek Scissors, a China specialist at the American Enterprise Institute, also observed that the biggest drops in Chinese imports have been in categories regarded as politically sensitive, including chemicals, pharmaceuticals, computers and other electronics.

He told the AP that the decline is unlikely to be a single-year blip, adding: “I don’t see the US being comfortable with a rebound in those areas in 2024 and 2025 ... I think it’s corporate America belatedly deciding Xi Jinping is unreliable.”

The subject of tariffs has been in the news again recently after Mr Trump - widely seen as the presumptive Republican candidate in this November's presidential election - indicated he would consider blanket tariffs of up to 60 percent on all imports from China if reelected.