Background and Relevance
In the past decade, Mexico’s trade deficit with China has more than doubled, reaching a record high of 119,858 million dollars in 2024, according to data from INEGI.
This growing trade imbalance has gained significance as US President Donald Trump emphasizes adjusting Mexico’s trade balance with the United States as a condition for better treatment of tariffs on imported Mexican products.
Nature of Trade
A significant portion of Mexico’s Chinese product imports consists of intermediate goods used to manufacture export-ready final products. This situation is linked to low national integration of production chains in certain Mexican industries, such as televisions, and the high global competitiveness of Chinese raw materials, parts, and components.
Trade Data in 2024
In the first five months of 2024, Mexico’s trade deficit with China increased by 1.2% to 47,554 million dollars.
- Mexican exports fell 1.5% to 3,827 million dollars.
- Chinese exports grew 1% to 51,382 million dollars.
Export Composition
According to the World Trade Organization (WTO), five metal products account for 56% of Mexico’s total exports to China in 2024, valued at 9,076 million dollars.
- Copper concentrates and ores: 3,719 million dollars
- Lead concentrates and ores: 687 million dollars
- Copper scrap: 394 million dollars
- Zinc concentrates: 176 million dollars
- Precious metals and their concentrates: 110 million dollars
Marcelo Ebrard, Mexico’s Secretary of Economy, mentioned in mid-June that while Mexico exports copper ores, it imports refined copper from China. He emphasized the importance of upgrading Mexico’s capabilities, stating, “It is evident that we need to scale up and upgrade our capacities.”
China’s Manufacturing Dominance
Over the past few decades, China has established itself as one of the world’s major manufacturing hubs. The WTO attributes this progress to China’s increasing integration into global value chains.
- Factors contributing to China’s manufacturing dominance include trade liberalization, foreign investment flows, labor productivity, a robust domestic market, quality infrastructure, and innovation promotion.
Currently, manufactured products account for over 95% of China’s total exports. This figure underscores the nation’s significant role in global trade.
WTO Concerns
A recent WTO report highlighted that disruptions in US-China trade are likely to cause substantial shifts in trade flows, raising concerns among third parties about increased Chinese competition.
