Mexico Overtakes China as Top U.S. Exporter – First Time in 17 Years
With a sharp decline in Chinese imports, Mexico poised to surpass China
Shift in the U.S. Import Market
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Last year marked a significant shift in China’s position in the U.S. import market, with its share expected to fall from the top spot for the first time in 17 years, dating back to 2006.
According to trade statistics from the U.S. Department of Commerce, the volume of goods imported from China experienced a sharp decline of over 20% from January to November last year. This decline made it increasingly likely that Mexico would surpass China in annual imports, as reported by Nihon Keizai Shimbun on the 10th.
In the U.S. import market for the same period, Chinese goods accounted for just 13.9%, marking the lowest share since 2004. This represents a significant decrease of 7 percentage points compared to the peak in 2017, which stood at over 21%.
Impact on Supply Chains
Nikkei’s interpretation is that the U.S. is shifting toward “friend-shoring,” where it establishes a supply chain centered around its allies and friendly nations. As a result, supply chains for items like home appliances, which previously heavily relied on imports from China, are diversifying to other countries. From January to November last year, the proportion of Chinese-made smartphones imported into the U.S. dropped by 10% compared to the previous year, while those made in India increased fivefold. Chinese-made laptops also saw a 30% decrease, while Vietnamese-made ones surged fourfold. Imports of Chinese-made clothing, furniture, and semiconductor manufacturing equipment continued to decline.
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Geopolitical Risks and the “China Plus One” Movement
Nikkei diagnosed that the “China Plus One” movement is spreading due to geopolitical risks surrounding China, as global companies are trying to avoid excessive dependence on China.
Niels Graeme, associate director of the Atlantic Council GeoEconomics Center, predicted that while it will take years for China Plus One to impact U.S. import statistics fully, its influence will continue in the long term.
Diversification of U.S. Imports
Not only Mexico, which is expected to break the record for the highest amount ever last year but also imports from Europe and Southeast Asia are increasing. From January to November last year, the number of imports from the European Union (EU) broke the record for the highest ever. Although the number of imports from the Association of Southeast Asian Nations (ASEAN) decreased compared to the previous year, it was the second highest. The share doubled compared to 10 years ago.
Meanwhile, the U.S. Department of Commerce announced on the same day that the U.S. trade deficit in November last year was $63.2 billion, down 2.0% from the previous month.
Exports decreased by $4.8 billion (1.9%) to $253.7 billion compared to the previous month, but imports also decreased by $6.1 billion (1.9%) to $316.9 billion, reducing the deficit. The trade deficit with the EU decreased by $3.5 billion to $15.6 billion compared to the previous month, and the trade deficit with China also reduced by $2.4 billion to $21.5 billion.
By. Man Joo Ha
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