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Amid Uncertain Trade Climate, a Look at Top Imports, Exports With Mexico

    Client Alerts
  • March 23, 2017

Auto companies, computer manufacturers and oil producers are closely watching how the trade relationship evolves between the U.S. and Mexico under President Donald Trump. Their products are among the top U.S. exports to Mexico, as well as the top Mexican imports to the U.S.

President Trump has said that Mexico is taking American jobs. He’s floated the idea of a border tax. He’s also called the North American Free Trade Agreement “a disaster.” NAFTA has been in place about 25 years, and – for better or for worse – it has boosted trade with Mexico enormously.

Given the uncertainty about where trade policy is heading, it’s worth examining what sorts of goods currently cross our southern border. After all, Mexico is our third-largest trading partner when you factor in all the goods that move back and forth, according to federal data. Here are the top imports and exports:

As you can see, car parts are the biggest source of trade in both directions, although the U.S. imports more than twice as much as it exports in terms of dollar value. It’s also worth noting the similarity in both lists: It’s truly a two-way street for computer parts, oil, and electrical equipment.

You may think that American farmers would be in favor of a trade adjustment, since Mexican farming imports are part of the list, while American products heading the other way are not. In fact, the National Pork Producers Council is among several industry groups lobbying Trump to avoid a trade dispute. American producers of dairy and corn have also highlighted the importance of their exports.

This is certainly top of mind for diplomats and trade officials. In a recent conversation I had during an informal dinner with foreign diplomats, Mexico’s recent suspension of sugar export permits to the U.S. was a talking point. We discussed how that situation had been flying under the radar and how it could impact sugar importers and consumers in the U.S. (I was also pleased to see my good friend and law school classmate, Juan Diaz Mazadiego, quoted in this article about it. Mazadiego is now the director of foreign trade with the Mexican Secretariat of Economy.)

Despite the trade deficit, the bottom line is that trade is robust in both directions across our southern border. That’s something to keep in mind amid discussions of a border tax, renegotiating NAFTA or utilizing nontariff barriers to trade – the changes would have complex spillover effects and unintended results in a variety of industries.