The United States shares a very strong trade relationship with Mexico for years. Mexico is a state that is abundant in resources and is listed as one of the 15 largest economies in the world. Besides this, it is also the second-largest economy in Latin America.
The two countries share high-level coordination between them, making Mexico the second-largest trading partner of the United States. Mexico is also the second-largest export market after Canada. The two-way trade between the two countries reached a whopping number of $614.5 billion in 2019. The extensive bilateral trade between the two countries has developed a strong economic and cultural relationship. The foundation of this relationship was laid under the North American Free Trade Agreement (NAFTA).
America is a very major part of Mexico’s export market as 80% of the Mexican goods are destined to be America’s. The proof of this is witnessed by the number of exports that America welcomed from Mexico, which was 80%. In 2019, Mexico served to be the second-largest exporter of crude oil to America as well as the biggest exporter of refined petroleum and natural gas. On the other hand, the US exports to Mexico include electrical machinery, vehicles, machinery, mineral fuels, and plastics. These export numbers are about six times higher than that of 1993, when NAFTA entered into the scene.
A year before NAFTA entered, the two countries’ merchandise balance stood at a surplus of $1.7 billion, which changed to a large deficit of $98.5 billion in 2019. The goods services are estimated to be $101.4 billion while the two-way services trade was measured to be $62.7 billion last year.
United States exports to Mexico
The goods export of the US to Mexico stands at $256.6 billion in 2019, which is 517% higher than that of 1993. In 2019, the goods and services trade with Mexico totaled to $677.3 billion. The top exports of the US to Mexico remained machinery, electrical machinery, mineral fuels, vehicles, and plastics in 2019, which remained in the two-digit category of 45, 42, 34, 21, and 16 billion dollars.
The export of services to Mexico also remained high at 32.9 billion dollars in 2019. This has been measured to be 217% higher than the services exports in 1993. These services are listed to be in the categories of transport, travel, and intellectual property.
US imports from Mexico
Being the second-largest supplier to America, the total imports were measured to be $358 billion in 2019. This has been seen to be 797% higher than the pre-NAFTA period in 1993. This acquires a total of 14.3% of the total US imports last year. The list of imports are machinery, electrical machinery, medical instruments, and mineral fuels with the digits of 101, 66, 64, 16, and 13 billion dollars.
The United States also imported agricultural products from Mexico, including fresh fruits, vegetables, wine and beer, snack foods, and processed fruit and vegetables. These imports totaled 28 billion dollars in 2019.
After the goods, Mexico also exported services to America, which were estimated to be $28.9 billion in 2019, being 301% higher than those in 1993. These services remained in the sector of travel, transport, technical, and other services.
The US trade deficit with Mexico in terms of goods was measured to be 101.4 billion in 2019, which is a 29.5 percent increase from the previous year. On the other hand, the services trade remained in surplus of $3.1 billion, which is a 39.3% decrease from 2018.
US Mexico Investments
The US foreign direct investments (FDI) were $100.9 billion in 2019, which was a significant elevation of 5.2% from 2018. These investments were made in the sectors of finance and insurance, manufacturing, and non-bank holding companies.
On the other hand, Mexico also holds investment projects in the United States that have approximated to be $21.5 billion during the last year. This is a 2.3% increase from the year before that.
These investments also include the sales of services in Mexico by the US-owned affiliates, which were calculated to be 42.6 billion dollars in 2017 (as per the data available).
The sales of services in the United States by Mexico owned affiliates have been measured to be 9.9 billion dollars.
The United States and Mexico are deeply tied by foreign relations, which play a major role in the strengthening of their relationship. The facts and figures speak for themselves in this regard very profoundly.