Right now, Mexico is the biggest exporter to the US for the first time in 20 years.
The latest figures from the US Department of Commerce show that it overtook China in 2023.
US imports from Mexico rose to $475.6 billion in 2023 (+4.6%).
US imports from China fell to $427.2 billion in 2023 (-20.3%).
The So What
Mexico has long benefited from its proximity to the US, free trade agreements with North America, and competitive labor costs. Now, the trend for shorter supply chains and nearshoring is further boosting its appeal.
More than 90% of North American manufacturing executives surveyed by BCG in 2023 said they plan to move some of their production and sourcing to different countries in the next five years.
BCG estimates that trade between the US and Mexico stands to grow by a further $300 billion over the coming decade.
“This is the natural evolution of a multidecade journey during which the public and private sectors have worked together to capitalize Mexico’s sweet spot in the globalization landscape. Recent shifts in global trade patterns are creating new opportunities if issues such as the adequate supply of electricity, water, and skilled labor are addressed,” says Eduardo León, a BCG managing director and senior partner in Mexico.
The automotive sector and mechanical machinery have driven the expansion to date, with bulky goods giving Mexico the upper hand over locations further afield. That said, the rising popularity of Mexico as a preferred country to manufacture highly engineered products has also created recent challenges. “When it comes to automotives, it’s especially important to carefully manage supply chains and outbound logistics, given possible capacity constraints in rail, trucks, and ports,” says Martin Metzker, who leads BCG’s Global Advantage practice in North America.
Other industries with potential to scale include household appliances, power tools, and medical devices.
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https://www.bcg.com/publications/2024/mexico-top-exporter-to-us-growth-outlook
