Record-Breaking Exports to the U.S.
Mexico has been registering record-breaking exports to the United States, with transportation of cargo between the two countries reaching $73 billion in June 2025, a 4.4% increase compared to the same period in 2024. In May, this figure was $74.5 billion, a 2.1% rise from the previous year. During the first half of 2025, Mexico’s exports to the U.S. totaled $264.38 billion, a 6.3% increase from the same period in 2024. The trade surplus with the U.S. soared to $96.21 billion, a 16.7% increase from the previous year.
Stagnant Internal Economy
Despite these impressive export numbers, Mexico’s internal economy remains stagnant. The National Institute of Statistics and Geography (Inegi) reported that the country’s economic activity only grew by 0.1% annually in July and decreased by 0.1% compared to the previous month. Essentially, the domestic economy is stuck.
Uneven Growth and Structural Factors
The discrepancy arises because high export volumes do not guarantee balanced growth. Most exports originate from sectors integrated into global supply chains, such as automotive, auto parts, electronics, and agroindustry. These sectors rely on foreign capital, highly automated processes, and limited value-added creation within the country. While they generate foreign exchange and employment, their impact on internal reality is insufficient.
Moreover, this growth is concentrated and possibly accelerated by fears of higher tariffs imposed by Donald Trump. Northern Mexico and the Bajío region benefit from integration with the U.S., while the south-eastern areas remain marginalized, with low investment levels, inadequate infrastructure, and poorly paid jobs. In essence, Mexico functions as two distinct entities: a dynamic exporter and another trapped in poverty and informality.
Weakened Domestic Demand
The situation is exacerbated by weak household purchasing power. Half of the workforce remains in informal employment, real wages have not increased significantly, and credit is expensive and scarce. Limited public spending due to fiscal discipline and insufficient borrowing capacity further contributes to a stifled internal engine.
Reasons for the Export Boom
The export boom is driven by structural factors, including the reliance of U.S. factories on Mexican inputs, nearshoring that continues to attract investments despite Trump’s threats due to geographical proximity and the USMCA, logistical advantages over Asia, and firm demand in the U.S., despite uncertainties.
In summary, it remains advantageous for the neighboring country to continue purchasing from Mexico, even though heavy reliance on a single market does not benefit Mexico.
The Paradox
Mexico excels as an exporting powerhouse but struggles to grow as a nation, with its external sector thriving while the internal one stagnates. The question is not whether Mexico can continue increasing exports to the U.S., as it likely will until Trump intervenes, but whether these records can ever translate into widespread prosperity. For now, the answer is no.
Key Questions and Answers
- Q: Why is Mexico’s economy stagnant despite record-breaking exports to the U.S.?
A: Mexico’s export growth is primarily driven by sectors integrated into global supply chains, which generate foreign exchange and employment but have limited impact on internal reality. Additionally, growth is concentrated in specific regions, leaving others marginalized and trapped in poverty.
- Q: What are the structural factors contributing to Mexico’s export boom?
A: The boom is driven by Mexico’s role as a supplier of indispensable inputs for U.S. factories, nearshoring advantages, logistical benefits over Asia, and firm demand in the U.S., despite uncertainties.
- Q: How does weak domestic demand affect Mexico’s economic growth?
A: Weak household purchasing power, high informality rates, stagnant real wages, and limited access to credit contribute to a stifled internal engine.
