Mexico leads the world in supplying goods to the US
This change is a direct result of US-China tensions as well as efforts to readjust supply chains from US and global businesses, according to the article published by Fortune.
Data released this Wednesday (February 9) by the US Department of Commerce shows that the total value of US goods imported from Mexico in 2023 increased by nearly 5% compared to 2022 to over 475 billion USD. At the same time, the value of US goods imported from China decreased by 20% to 427 billion USD.
The last time the value of US goods imported from Mexico was higher than the value of goods imported from China was in 2002.
In recent years, economic relations between the US and China have deteriorated quite a bit because Beijing and Washington confront each other a lot in trade issues as well as a number of other areas.
Since 2018, the administration of former US President Donald Trump began imposing tariffs on goods imported from China with the view that China’s trade activities violate global trade regulations. When he became President, Mr. Joe Biden also kept these measures in place, a fact that clearly reflects the US side’s stance towards China.
In the context of many unfavorable developments in relations with China, US President Joe Biden’s administration has urged businesses to find suppliers in allied countries or bring production back to the US. In addition, supply chain disruption due to the COVID-19 pandemic also forces American businesses to consider finding more suppliers close to the United States.
The COVID-19 pandemic and global geopolitical tensions are creating unprecedented changes in global trade in the past 20 years – Photo: New York Times
The trend is difficult to reverse
Mexico has become one of the biggest beneficiaries of the shift of global businesses away from China. However, the reality is not that simple. Some Chinese businesses have taken advantage of this opportunity to open factories in Mexico to benefit from the trilateral trade agreement including the US, Mexico and Canada. Accordingly, goods produced in Mexico are tax-free in North America.
According to the New York Times, research by professor Caroline Freund of the School of Global Policy and Strategy (SGPS) shows that US trade with China has decreased for products that currently have high tariffs, while Trade in goods with low tax rates, such as hair dryers or microwave ovens, continues to grow.
Chief economist at the World Trade Organization (WTO), Mr. Ralph Ossa affirmed that trade between the US and China has not collapsed but is growing up to 30% lower than trade between the US and the rest. of the world.
There have been two periods in history when trade between the US and China slowed down significantly, according to Mr. Ossa’s analysis. The first time was when trade tensions between the two countries escalated in 2018. The second time was when Russia-Ukraine tensions escalated, so the US and its allies were forced to apply strong sanctions. hands, thus further complicating global trade relations.
China expert at the American Enterprise Institute, Mr. Derek Scissors, emphasized that US imports from China have decreased sharply with products such as computers or electronic goods and chemicals, pharmaceuticals, and other types of goods. has high political sensitivity.
Commenting on future prospects, Mr. Scissors might not help but wonder: “I do not think that the US will accept the recovery of exports of these types of products from China in 2024 and 2025. Therefore, the situation is not easy to change”.
