Mexico Claims Trade Throne Over China in the U.S. Market
Bloomberg recently reported that Mexico has surpassed China as the leading exporter to the United States.
They arrived at this conclusion by employing a complex methodology that relies on a 12-month rolling average of the U.S. import share.
However, in reality, Mexico has maintained this position throughout the entirety of 2023. At MarketWatch, we prefer simpler calculations. Our analysis, based on quarterly data measuring trade through a balance of payments perspective, reveals that Mexico took the lead during the third quarter of 2022.
Although the two datasets exhibit some variances, the information Bloomberg utilizes is more up-to-date, relying on U.S. Customs and Border Protection documents. In contrast, balance of payments data is adjusted to align with gross domestic product calculations and is generated on a quarterly basis rather than monthly.
Additionally, the balance of payments data accounts for U.S. military purchases of goods abroad, fuel acquisitions in foreign ports by U.S. air and ocean carriers, and other deductions.
Regardless of the data source, the overarching narrative remains consistent. The trade relationship between the United States and China is deteriorating, with Mexico benefiting as companies seek more favorable government environments.
Moreover, there is a financial dimension to this narrative. One of this year’s most noteworthy currency pairs has been the Mexican peso against the Japanese yen (MXNJPY), experiencing a remarkable 28% surge. In contrast, the U.S. dollar has seen a 5% increase against the offshore Chinese yuan (USDCNH).