Good performance of Mexican exports to the United States

Published on 05 February 2019

Despite the commercial war, Mexican exports have continued their growth and would have closed in 2018 with a historic figure.

Being located next to the United States is a comparative advantage impossible to compensate for any country in the world. Additionally, the production of raw materials and cheap labor make a neighboring country even more privileged.

In this way, Mexico has advantages over Latin American and Asian countries, and against Canada. Its industries have been complemented by manufacturers of assembled products from the United States, as well as distributors of technological products or household appliances. This is complemented by a good endowment of minerals and ample lands for the cultivation of agricultural products, for which reason the Mexican export offer is diversified.

The companies of the Latin country have taken advantage of these conditions, and have achieved good results over more than 3 decades .. The following table, which shows the evolution of the value of shipments of the most exported products to the United States, and gives an idea of supply and performance.

As you can see, almost all of the products have registered significant increases in the most recent 12-month period in the Veritrade system, compared to the same period of the previous year. However, the question arises whether this would have had a seasonal reversion as a result of the tariff measures taken by the Donald Trump government to protect the US labor market.

To answer this question, the following table evaluates the evolution of the value of exports of the manufactured products included in the previous table in the months after the start of the application of tariffs on steel and other products (since June 2018) , compared to the same period of 2017.

The result is surprising. So far, only the exports of automobiles have been affected in a visible way, and probably 2019 is a good year after the signing of the Agreement between the United States-Mexico -Canadá (USMCA), successor to Nafta, which was believed, was going to be replaced with much more restrictive terms. 2018 would have been the year with the largest export from Mexico to the United States, and the experience could be repeated in 2019 if there is no significant negative external factor.

With the USMCA signed, it can be said that the commercial war has ended in America. However, the challenge remains to face the onslaught of persistent trade tension between the United States and China, which has only been diminished by the truce, but that could worsen and bring negative consequences for the entire global economy.

For more information about Mexican exports to the United States, you can access the Veritrade portal.
Request your free trial by going to: https://bit.ly/2MQpJsP

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