Mexico is one of the United States' largest trading partner, with nearly $1.7 billion in products and services crossing the U.S.-Mexico border every day. Although President Trump called off his administration's plan to impose tariffs on Mexican imports only nine days after it was announced at the end of May 2019, the threat of the tax shed light on the trading relationship between the two countries and the sheer amount of goods that flow into the U.S. from Mexico every day.
A tax levied on U.S. imports from Mexico would have impacted the price of everything from cucumbers to cars, televisions, refrigerators, and alcohol.
- Mexico was the United States' second-largest supplier of imported goods in 2018; trade with Mexico totaled an estimated $671.1 billion in 2018 and imports made up $371.9 billion of that amount.
- The largest categories of imported goods from Mexico are vehicles, electrical machinery, machinery, agricultural products, mineral fuels, and optical and medical equipment.
- Although President Trump called off his administration's plan to impose tariffs on Mexican imports only nine days after it was announced at the end of May 2019, the threat of the tax shed light on the trading relationship between the two countries.
According to the Office of the United States Trade Representative, trade with Mexico totaled an estimated $671.1 billion in 2018, more than our trade total with Canada. Imports made up $371.9 billion of that amount. Mexico was the United States' second-largest supplier of imported goods in 2018.
Here are the top U.S. imports from Mexico in 2018.
At $93 billion, cars or car parts were almost a quarter of all goods coming into the U.S. from Mexico in 2018. This includes $22 billion worth of car engines, $5 billion in car seats, and $5 billion in chassis. American automakers like General Motors (GM) and Ford (F) have plants in Mexico. Most of the cars and car parts that the U.S. imports from Mexico are made by American automakers and intended for the U.S. market., even though they are manufactured in Mexico.
Electric Machinery and Equipment
Nearly $64 billion of U.S. imports in 2018 were smaller electric appliances like phones, televisions, vacuum cleaners, and parts. This includes $26 billion of computers and computer parts, semiconductors, and software.
Machinery and Mechanical Appliances and Parts
The U.S. imported $63 billion worth of goods in this category in 2018. Mexico is a huge producer of home appliances, including washing machines, refrigerators, and air conditioners. Between 30% and 44% of the U.S.' imports in this category come from Mexico every year.
Mexico is the biggest source of all agricultural imports for the U.S. In 2018, this included $5.9 million of fresh vegetables, $5.8 billion of fresh fruit, $3.6 billion of wine and beer, $2.2 billion of snack foods, and $1.7 billion of processed fruit and vegetables. Avocados, tomatoes, onions and bell peppers are popular vegetable imports from Mexico. The U.S. imported $2.3 billion of tomatoes and $1.7 billion of avocados from Mexico in 2018. The U.S. also imported $3.5 billion of beer, including the Mexican beers the country is renowned for, such as Corona, Dos Equis and Modelo, and the many tequilas for which the country is renowned. Mexico also supplies the U.S. with the many tequilas for which the country is renowned.
Despite being one of the largest crude oil producers in the world, U.S. consumption exceeds domestic production. In 2018, the U.S. imported $16 billion of mineral fuel from Mexico. This category includes coal, petroleum, and natural gas.
The $15 billion in imports under this category includes instruments used in surgeries and medical procedures.
U.S.-Mexico Trade Relationship Buoys Both Economies
Mexico is an integral part of the U.S. economy and soon may become the U.S.'s largest trade partner. In May 2019, amidst speculation about how tariffs on imports from Mexico would have impacted the average American consumer, Larry Kudlow, the director of the National Economic Council at that time, acknowledged that the costs of tariffs are typically passed on to consumers from companies. In the event of a tariff imposed on Mexican imports, producers of goods would be unlikely to absorb the additional tax themselves, and would more likely pass it on to consumers, making all of these goods more expensive.
After NAFTA, many North American companies built supply chains that stretch across Mexico, the United States, and Canada; not only would tariffs hurt the American consumer, but it was predicted that retaliation from the Mexican government would damage the U.S. economy in the form of new trade barriers. Conversely, the Mexican economy is slowing and its currency has weakened; the country's trade relationship with the U.S. has been a bright spot in an otherwise bleak economic landscape. The trade relationship between the two countries serves to buoy both economies as a mutually beneficial exchange.