China Lost war with Mexico. Mexico is the largest trade partner of US

In the first six months of this year, the US and Mexico traded around $397 billion worth of goods, which is much more than the $276 billion traded between the US and China during the same period. This change happened because of shifts in global supply chains caused by trade tensions between the US and China, which started around 2018. These tensions made investors worried about risks, so they began looking for other places to do business.

This trend sped up in 2020 when China’s strict COVID-19 policies showed that depending too much on one country for manufacturing was risky. Due to disagreements between the US and China, China was not the US’ top trading partner when Mexico took the lead. Canada was the top trading partner until 2014 when China overtook it. Canada and Mexico were both competing for the top spot after 2018 because of tariffs the US imposed on Chinese imports.

Imports from China to the US did increase briefly in 2020 because the pandemic disrupted supply chains, but they started going down later that year. Mexico is now the top trading partner because of its strong manufacturing sector. Luis Torres, an expert, says that Mexico’s growth in manufacturing is a big reason for this change. Mexico became the US’ top manufacturing trading partner in 2022, surpassing China.

Mexico is becoming a popular place for factories, which is good for trade with the US. It’s close to the US, making it easy to transport goods. This is called “nearshoring,” and it’s a trend where companies source or produce goods from a nearby country.

Some of the main things the US imports from Mexico are vehicles, machinery, and fuels. The car industry is a good example of how the US and Mexico work together. A US factory makes part of a car and sends it to Mexico for assembly, and then the finished car comes back to the US.

Interestingly, even Chinese companies are moving to Mexico to serve their US customers because of tensions between the US and China. This includes companies that make things like TVs and car parts.

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