TREND: The year started off continuing with December 2020’s trends: Mexico is still the US’ second largest trade partner, China’s percent of total trade continued to grow this month from 14.9% to 15.6% and is still the US’ largest trade partner. Mexico’s percentage of total trade grew from 14.3% to 14.6%, which is a positive sign of strengthening trade ties but total bilateral trade with the US was 1.31% lower than January 2020 and 1.41% lower compared to December 2020. However, US imports from Mexico grew more than 2% for the third consecutive year and have continued a growing trend in January for more than 10 years in a row.
•Mexico’s bilateral trade flows maintained a strong performance as US imports from Mexico in January have grown consistently over the last 10 years. Although US exports to Mexico continued to decrease for the second consecutive year, total trade flows contracted only by 1.31%.
•Total US-Mexico bilateral trade is projected to grow this year compared to 2020. Bilateral trade between the US and Mexico in 2020 contracted 12.44% compared to 2019 but the rapid acceleration of vaccine distribution in the US and economic recovery in both countries is projected to push bilateral trade to grow this year
•Mexico is still the second top trade partner of the US, with China continuing to grow its participation as the US’ top trade partner. Total US-Mexico trade in 2021 equals US $48.5 billion or 14.6% of total US trade, which is lower to China (US $52 billion) but still larger than Canada (US $45.8 billion). January 2021 continued with the same top 5 US trade partners as 2020: 1. China, 2. Mexico, 3. Canada, 4. Japan, and 5. Germany.
•As of January 2021, Mexico grew its participation as a top export destination for US products compared to December 2020 from 14.9% to 15.3% share of total US exports. However, Mexico is still behind Canada (16.6%) and ahead of China (10.1%). Last year, Canada closed the year with 17.8% and China with 8.7% share of total US exports. Canada’s percent of total exports from the US contracted this year, which Mexico and China both benefited from.
•The pandemic helped China recover as the US’ largest trade partner last year and positioned it to start 2021 ahead of Mexico and Canada. China started the year as the top source of US imports (19.1% of total), followed by Mexico (14.2%) and Canada (12%). The year also closed with China as top source of US imports (18.6% of total), followed by Mexico (13.9%) and Canada (11.6%). While Mexico and Canada’s percent of total imports grew compared to 2020, Chinese exports have continued to grow at a more accelerated pace since April 2020.
•In January 2021, most US imports from Mexico grew compared to December 2020; the 3 categories that grew the most were: (i) works of art & antiques (269.29%), precious stones, metals, pearls & coins (37.48%), and stone, glass, and ceramics (17.34%). The top 5 US imports from Mexico with the most growth this year compared to January 2020 were: (i) cotton, including yarn and woven fabric, (ii) ships, boats, and floating structures, (iii) food industry residues & waste, (iv) albuminoidal substitute, modified starch, glue, and enzymes, (v) tobacco and tobacco substitutes.
• During the same period, US exports to Mexico contracted in most sectors except for a couple compared to December 2020. The three sectors that grew the most in this period were: (i) furskins and artificial fur (265.44%) (ii) ores, slag, and ash (54.12%), and (iii) base metals, cermets, and articles thereof (29.53%). The top 5 US exports to Mexico compared to January 2020 were (i) furskins and artificial fur (ii) ships, boats, and floating structures, (iii) live animals , (iv) umbrellas, walking sticks, riding-crops etc, parts,, (v) fertilizers.
• If you’re interested in seeing these trends visually check out AmCham’s Trade Dashboard English – Spanish
TAKEAWAY: US-Mexico bilateral trade contracted by less than 2% compared to December and January 2020, however US imports from Mexico have continued a more than 10 year growth trend in January. However, US exports to Mexico contracted both compared to January and December 2020. US imports from China have continued to grow since April 2020 and China is still the US’ largest trade partner and source of imports. Although the projections for economic recovery in both the US and Mexico and vaccine rollouts are a good sign for bilateral trade recovery this year, the rising competition with China will be the #1 risk factor for growing bilateral trade. President Biden has signaled its intent to strengthen North American integration and continue decoupling with China, so this year will be crucial to strengthen Mexico’s bilateral trade with the US
* Spotlight by José Burnes, AmCham/Mexico’s Trade & Investment Center Manager. The American Chamber of Commerce of Mexico (AmCham/Mexico) seeks to facilitate commercial integration between Mexico and the US, build a favorable business environment, and contribute with proposals to consolidate Mexico’s competitiveness and development as a top destination for American investment. By connecting companies and sharing trends and market intelligence, its Trade & Investment Center boosts cross-border business. Twitter: @amchammexico