México Emerges from China: Nearshoring
In baseball, pinch hitters are very important because they decide the games. Within international economic politics there are emerging countries. Mexico is an emerging country due to the increase in its financial market, the number of free trade agreements, highlighting the USMCA, in addition to the variety of its sources of income. There is no country as connected to the United States, so when its economic recovery happens, Mexico will benefit the most simply by being the emerging country most integrated into the US economy.
Mexico's opportunity arose in 2018 when the United States established tariffs on goods manufactured in China, followed by supply chain disruptions due to the pandemic, which altered the international market and the flow of investments. The amounts speak for themselves: in the first four months of 2023, total trade in manufactured goods between Mexico and the United States reached 234.2 billion dollars. The import of Mexican goods to the United States reached 157 billion dollars and the exports of American goods to Mexico reached 107 billion dollars.
Trade between Mexico and the United States in these four months of 2023 was 15.4% of United States international trade; with Canada was a little lower, 15.2%, and that corresponding to China notoriously lower, 12%. The automotive industry is a key component. The strategy is simple but efficient: a US plant produces an intermediate good that it exports to Mexico where it becomes part of the assembly process before the final product (the car) is exported to the United States. This is good news and a reflection of the success of the USMCA and Mexico's privileged position in addition to other advantages, including geographic location and trained and competitive labor.
