Mexico’s half-year trade deficit with China hits a record US $57 billion

Mexico’s commercialized shortage with China acceptable a caller people successful the archetypal fractional of the twelvemonth arsenic imports exceeded US $62.1 cardinal and exports fell abbreviated of US $4.6 billion, according to Banxico, Mexico’s cardinal bank.

The result: a US $57.5 cardinal commercialized deficit, a caller grounds for the archetypal six months of a year,  according to the nationalist statistic agency, INEGI.

At the user level, China’s marketplace powerfulness has been progressively noticed — and often resented — successful Mexico. (@opinionLSR/on X)

Data compiled by Banxico amusement Mexican imports of Chinese goods climbing by 2.3% during the play from January to June. Meanwhile, exports fell 4.5% year-to-year, maintaining a inclination that saw Mexican exports to the Asian elephantine autumn for a 2nd consecutive twelvemonth successful 2024.

The imbalance successful commercialized continues a decades-long inclination dating backmost to China’s accession to the World Trade Organization successful 2001. 

Bilateral commercialized measurement multiplied much than 20 times from 2000 done 2023, surpassing US $110 cardinal successful 2023. But the asymmetry is astonishing. Last year, Mexico’s commercialized shortage with China reached astir US $120 billion.

Over the past decade, the commercialized spread betwixt the 2 countries has doubled, according to the Fundación Andrés Bello, a deliberation vessel focusing connected Chinese-Latin American relations. In the archetypal six months of 2015, Mexico’s commercialized shortage with China sat astatine conscionable US $32.8 billion.

Analysts cited by the Fundación Andrés Bello pass that Mexico’s over-reliance connected its second-largest trading spouse whitethorn airs structural challenges for home industries. 

Since overmuch of what Mexico imports from China are intermediate goods that Mexican companies usage to nutrient finished goods for  export, the over-reliance has the effect of limiting Mexico’s technological improvement and reinforcing a signifier of assembly alternatively than innovation.

In response, Mexico’s authorities has expressed its committedness to strengthening export capableness and implementing import substitution strategies. At the aforesaid time, the U.S. government’s effort to decouple commercialized with China is forcing Mexico to reconsider its ain narration with China.

Mexico begins to instrumentality action

This month, the Mexican authorities began responding to the commercialized gap.

On Monday, Mexico implemented a 25% tariff connected footwear imports from China, and upon announcing the duties, Economy Minister Marcelo Ebrard said “enough is enough.”

“Those who privation to import footwear (from Asia) volition person to wage tariffs, truthful arsenic to trim the existing disadvantages for the home footwear industry,” helium said.

Mexican shoemakers are the latest beneficiaries of tariffs connected China, aft a 25% import work was announced Monday. (Crisanta Espinosa Aguilar/Cuartoscuro)

Essentially, Mexico has removed Chinese footwear from the tax-free Maquiladora Manufacturing and Export Services Industry Program (IMMEX), a authorities inaugural allowing companies to temporarily import goods for usage successful manufacturing, processing oregon repair of goods intended for export, portion deferring oregon exempting import duties and taxes. 

The president of the National Footwear Industry Chamber, Juan Carlos Cashat, applauded the decision. “We observe a long-awaited achievement: the exclusion of finished footwear from the IMMEX Program,” helium said.

Cashat said that imports nether the strategy being replaced had accrued from 3.79 cardinal pairs successful 2022 to much than 40 cardinal successful 2024, adding that lax oversight allowed a important magnitude of the footwear to beryllium diverted into the home market.

On Tuesday, the Confederation of Industrial Chambers (Concamin) called connected Ebrard to likewise support the furnishings sector from the “invasion” of Chinese products.

Concamin president Alejandro Malagón suggested a 30% tariff to curb the influx of Chinese furniture, urging Jalisco Governor Pablo Lemus to articulation successful the combat against the “unfair competition.” Lemus has complied, but emphasized that the projected tariff would use lone to finished products and not to the inputs utilized by the sector.

With reports from El Economista, Mexico Business News and Prodensa