Mexico outpaced China as the United States’ top exporter of goods in 2023, marking a shift in the international trade landscape that has not occurred since the early 2000s.
For decades, China was the number one exporter of goods to the United States. However, a crumbling Chinese economy post-COVID opened the doors for Mexico to take its place as the top exporter of goods to the U.S., according to the latest figures from the Commerce Department, per AP News.
In 2023, the U.S. imported over $475 billion from Mexico, marking a 5% increase year over year. At the same time, the U.S. imported roughly $427 billion from China, representing a 20% decrease. Overall, the U.S. imported about $48 billion more from Mexico than China during the year.
Part of the reason for China’s lower export volume in 2023 was due to existing tariffs on Chinese goods and ongoing tensions between Washington and Beijing.
China’s decision to support Russia in its war with Ukraine “triggered all sorts of alarms,” said Jesús Carmona, the president for Mexico and Central America at Schneider Electric, per The New York Times. “People realized we cannot have such dependencies on China, which we built up over the last 40 years as we were making China the factory of the world.”
The U.S. is “decoupling” from China, which is “weighing heavily on trade flows,” explained Moody’s chief economist Mark Zandi, per the NYT.
Once seemingly immune to such things, the global trade landscape is now changing significantly due to geopolitics.
“There was a period where geopolitics didn’t really matter for trade much, but as uncertainty increases in the world, we do see that trade becomes more sensitive to these positions,” said Stela Rubinova, a research economist at the World Trade Organization, per the NYT.
In 2022, Mexico exported over $111 billion worth of motor vehicles to the U.S., according to the United Nations COMTRADE database on international trade. While motor vehicles were Mexico’s top export to the U.S., China’s top export was electronic equipment, which was valued at $145 billion.