Mexico set to surpass China as the largest exporter to the US in 2023

The anti-China restrictions imposed by the United States are paying dividends and, on one level in particular, Mexico has been the major beneficiary. Since the toughening of President Joe Biden’s rhetoric and the imposition of tariffs and restrictions on the export of critical technologies from China to the U.S., Beijing’s exports have dropped. Over the same period, Mexico has been gaining ground, according to U.S. Census Bureau data released Tuesday.

Mexico overtook the Asian giant in the value of exports to the U.S. in the cumulative first 11 months of 2023, totaling $438.986 billion, while China lagged behind with $393.137 billion. Everything points to 2023 being the year in which Mexico dethroned China as the main exporter to the United States. Among the products that the U.S. purchases most widely from Mexico are cars and auto parts, electronics, petroleum, and agricultural products.

In November, according to the most recent figures, Mexico exported a total of $39.81 billion to the U.S., while China exported $35.494 billion. In third place is Canada, the other member of the USMCA agreement between the three American nations, which replaced NAFTA in 2020. Canada exported $36.141 billion in November, bringing its cumulative exports for 2023 to $387.727 billion.

Trade tensions between the U.S. and China are also generating excitement and expectation in Mexico due to the potential of nearshoring — the interest of companies in leaving China to secure their supply chains in countries that are “allies” of the U.S. Legislators in Washington have warned that Chinese companies are looking to move operations to Mexico in order to continue selling to the U.S. market.

Although foreign direct investment (FDI) announcements have broken records in Mexico, the country does not have the same advantage as in exports. According to data from the Organization for Economic Co-operation and Development, the U.S. was the leading recipient of FDI globally during the first six months of 2023, followed by Brazil, while Canada and Mexico tied for third place. The U.S. was also the largest investor globally, followed by China and Japan.

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