The USCMA Advantage

The United States, Mexico, and Canada operate within closely integrated economies, largely due to the United States-Mexico-Canada Agreement (USCMA). This agreement, which superseded NAFTA in 2020, has modernized trade relations by incorporating provisions for digital commerce, labor rights, and environmental protection.

A cornerstone of USCMA is the stipulation that 75% of automotive components must originate from North America to qualify for tariff-free status. This rule aims to bolster regional manufacturing. Furthermore, the agreement mandates that 40% to 45% of auto production within North America must be carried out by workers earning a minimum of $16 per hour. This provision seeks to narrow the wage gap between the U.S. and Mexico.

This framework not only stabilizes business operations and reduces consumer costs but also aims to improve wages and labor standards for Mexican workers.

Imports From mexico: A Detailed Look

The United States imports a diverse array of goods from Mexico. The top five import categories in 2023 were:

• Cars: $44.9 billion
• Motor vehicles; parts and accessories: $35.2 billion
• Delivery trucks: $26.3 billion
• Computers: $25.6 billion
• Crude petroleum: $20.4 billion

Automobiles and automotive components constitute the most significant imports. Major U.S. automakers, including Ford and GM, maintain production facilities in Mexico, manufacturing vehicles, engines, and related products for subsequent sale in the United States.

Other notable imports include insulated wiring, video displays, medical devices, air conditioning units, and beer.

U.S. Exports to Mexico

While imports from Mexico are substantial, U.S. exports to Mexico are also significant, totaling $334 billion in 2024.

The primary exports from the United States to Mexico in 2023 included:

• Refined petroleum: $29.7 billion
• Motor vehicles; parts and accessories: $17.7 billion
• Petroleum gas: $8.87 billion
• Combustion engines: $5.84 billion
• Corn: $5.27 billion

The China shift

China was formerly the United States’ largest import partner.Though, the tariff disputes of the late 2010s, under the trump administration, created challenges for businesses, including increased expenses and geopolitical uncertainties.

Consequently, many companies began to nearshore production, relocating operations closer to the United States. Mexico emerged as a prime destination, leading to its ascent as the U.S.’s top import partner in 2023. In 2024, U.S. imports from China amounted to $439 billion.

The Broader Viewpoint

The expansion of trade between the U.S. and Mexico is attributable to initiatives like USCMA and a partial shift away from China.

Mexico’s geographical proximity, lower labor costs, and favorable trade agreements have solidified its role in the U.S. supply chain. Together, robust U.S. exports to Mexico contribute to a mutually beneficial relationship.