Mexico Surpasses China as Top US Trade Partner in 2023

Mexico Surpasses China as Top US Trade Partner

New data released earlier this month by the Commerce Department shows that Mexico has surpassed China as the Top US trade partner. In 2023, Mexico became the leading source of goods imported to the US, overtaking China for the first time in over 20 years. This shift in trade dynamics is attributed to ongoing tensions between the US and China, with trade disputes and tariffs playing a role.

Impact on Supply Chain and Costs:

The transition to Mexico as the top trade partner is seen as a strategic move to reduce costs and expedite the supply chain, ultimately leading to lower costs of goods in the US and an added level of control for shippers.

Chinese imports remained above Mexican imports from 2002 until this recent data. While Chinese imports surged at the start of the pandemic, between 2022 and 2023, the value of goods imported from Mexico increased by almost 5%, reaching over $475 billion, while Chinese imports fell by 20% to $427.2 billion.

Mexico’s Economic Growth:

Mexico experienced a strong economic performance in 2023, with its peso becoming the fastest-growing currency globally, a thriving stock market, and a 40% increase in Foreign Direct Investment.

The United States-Mexico-Canada Agreement (USMCA), in effect since 2020, has strengthened ties between the US and Mexico.

Nearshoring and Infrastructure Investment:

Mexico’s economic success is attributed to “nearshoring,” bringing supply chains for crucial goods closer for cost reduction and faster supply chains. To sustain economic growth, Mexico needs to invest more in its infrastructure and ensure sufficient energy availability.

Navigating Cross-Border Challenges and Maximizing Value

“In light of recent market dynamics that have positioned Mexico as the US’ leading trading partner in 2023, 3PLs and forwarders with robust cross-border transportation capabilities and integrated “door-to-door” approach within the US-Mexico and US-Canada trade corridors are adding tremendous value for today’s shipper.

Within Legacy, we’re finding more opportunities to have deep, strategic conversations with our customers to help them navigate the intricate regulatory, compliance, and customs frameworks required to re-align global sourcing strategies. We know striking the right balance is critical to staying ahead of these market dynamics.”

– Dustin Miles – Director, International & Customs Brokerage