Mexico leads exports to the United States by trade war

Mexico was placed as the largest trading partner of the United States in the first half of 2019, benefiting from the trade war between the world's largest economy and China.

In the first half of the year, merchandise trade (imports and exports) between Mexico and its northern neighbor reached US $ 308,886 million, surpbading Canada (US $ 306,697 million) and China ( 271.044 million US dollars). Census Bureau.

Mexico has benefited from the trade war between the two largest powers in the world, while maintaining a positive trend of its sales in the US market, while that of Canada to the same destination was negative in the first half of the current year.

Over the past decade, from 2008 to 2018, US merchandise trade with Mexico has been more dynamic (66.3% cumulatively) than that recorded with China (61.4%) or Canada ( 3.4%). %).

The United States is in the process of ratifying a new trade agreement with Mexico and Canada, while its trade war with China has intensified. The renegotiated North American Free Trade Agreement, signed on November 30, 2018 and renamed the Treaty between Mexico, the United States and Canada (Usmca, acronym in English), the application of the legislation must come into force in the United States.

Usmca addresses new issues, such as digital commerce and state-owned companies, increases North American content requirements for vehicles, expands access to the agriculture market and reduces US obligations in areas such as government investment and purchases. Some US Congressmen Call for Changes to Labor, Environment, Compliance and Intellectual Property Provisions in the Pharmaceutical Industry, Others Support Implementation of the Usmca in its present form.

Thank you the trade war

For the moment, the trade conflict between the two major economic powers has generated short-term opportunities for Mexico, which surpbaded China in product exports to the United States in March, a fact that had not happened since July 2003

Last Thursday, President Donald Trump announced that he would impose additional tariffs of 10% on imports of Chinese goods worth $ 300 billion as of September 1st.

Meanwhile, negotiations between the two powers will continue to end the trade war.

In 2018, the United States imported $ 562,852 million worth of Chinese goods from China. If the $ 300 billion threat were met, it would be taxed at 95% of total US imports from that Asian country.

Since 1 June, China's new customs tariffs on 5,410 US products have come into force, amounting to 60 billion US dollars. Customs taxes are applied with rates of 10%, 20% and 25%. China already applied tariffs of about US $ 110 billion on US products, which came into effect in three stages.

Mexico stands out

With respect to US imports of products in the first half of 2019, those in Mexico grew by 6.3% at the interannual rate to reach $ 179,612 million. On the other hand, imports from China amounted to $ 219,044 million, a decrease of 12.4%, and imports from Canada, by 1.1%, to $ 158,143 million.

On the contrary, US exports decreased with their three main trading partners: those destined for Canada decreased by 2.8% (US $ 148,554 million), those exported to Mexico by 1.7% (US $ 129,274 million). US dollars) and deliveries. 18.9% (64,107 million USD) collapsed in China.

Read the original note here.