China has been the leading trader with the U.S. for years but just released Federal Reserve Bank of Dallas numbers show that Mexico has now become our number one trading partner.
In the biggest change in the global trading world, we now do more business with our neighbor to the south, Mexico, than with any other country in the world. According to the Federal Reserve Bank of Dallas, trade between the U.S. and Mexico reached $263 billion through the first four months of 2023, an all-time record.
As such Mexico bumped our previous top trading partner, China, from the number one position for the first time since 2014.
China had been dramatically gaining business ever since its admission to the World Trade Organization in 2001. But more recently, political pushback from both the Trump and Biden administrations, combined with supply chain logjams that started with the pandemic in 2020 and caused massive delays in getting goods to America have dramatically changed the dynamics of global trade.
And unlike the trade with China which was largely one-way with the U.S. imports far outweighing its exports, trade with Mexico this year has been more balanced. For the first third of 2023, the Federal Reserve reported Mexican imports into the U.S. were about $157 billion while American exports to Mexico were about $107 billion.
The Fed said doing business with Mexico was more advantageous for U.S. companies. “Sourcing manufactured goods from Mexico helps prevent supply chain issues and utilizes far fewer resources than having goods shipped from overseas.”
With the political conditions between China and the U.S. showing no signs of easing and more attention being paid to environmental sustainability, it’s likely Mexico will continue to gain share as a U.S. trading partner.