(USNewsBreak.com) – The United States imports trillions of dollars worth of goods each year. It has a net deficit in the global trade market, meaning it imports more than it exports. For the longest time, the US’s largest supplier was China. However, that has now changed, and another country is sitting in that top spot.
The changes began happening around the time the 2020 health emergency struck the world. When the cost of shipping a container increased by nearly 20%, it became clear the US needed a different solution. Marco Villarreal took advantage of an opportunity and sought to draw manufacturers to Mexico as a more cost-effective alternative to China. A few years later, those bets are paying off.
Mexico overtakes China as the leading source of goods imported by US https://t.co/AyhMaFWLJ7
— The Associated Press (@AP) February 8, 2024
According to data provided by the Bureau of Economic Analysis, in 2023, the United States imported $427.2 billion worth of goods from China, still quite a hefty sum. However, the amount it imported from Mexico clocked in at $475.6 billion. This figure is roughly the same as in 2022, but the drop-off in Chinese imports solidified Mexico’s spot as the top provider. Incidents in 2018 and 2022, trade tensions, and Russia’s invasion of Ukraine have contributed to the decline.
Derek Scissors, a China specialist at the American Enterprise Institute, spoke with The Associated Press and noted that the biggest drop-offs were in the chemicals and pharmaceutical sector and the computers and electronics market segment. He predicted that the imports in those categories would remain lower in 2024 and 2025, as well.
Experts partly attribute the decrease to the 2020 health emergency’s passing, but they also credit trade tariffs implemented by former President Donald Trump and maintained by President Joe Biden’s administration. Then, of course, there’s the issue of the escalating tensions between the two nations. Scissors said the escalation resulted from “corporate America belatedly deciding [Chinese president] Xi Jinping is unreliable.”
Additionally, the net deficit between imports and exports in the US narrowed by 18.7% as exports increased slightly.
Copyright 2024, USNewsBreak.com
