Mexico Tops China as Top Exporter to the U.S.

Mexico has surpassed China as the top exporter to the United States for the first time in 20 years.

A new Boston Consulting Group report highlights the latest figures from the US Department of Commerce showing that, in 2023:

  • Imports from Mexico to its northern neighbor rose 4.6% to 475.6 billion USD.
  • At the same time, US imports from China fell 20.3% to 427.2 billion.

Eduardo León, a BCG managing director and senior partner in Mexico, said the public and private sectors have aligned to “capitalize Mexico’s sweet spot in the globalization landscape.”

China had taken the top spot thanks to significant investments infrastructure, technology, and a labor force that drove a cost-effective manufacturing base for a plethora of products.

The drop to second place is part of a long-term trend influenced by tariffs and post-pandemic global supply chain realignment.

According to the Deloitte 2024 manufacturing industry outlook, annual construction spending within the manufacturing sector reached 201 billion as of July 2023, a 70% year-over-year increase.

Deloitte analysts further predict smart factories and generative AI will play a crucial role enhancing Mexican industry’s competitive standing.

More than 90% of manufacturing executives surveyed by BCG in 2023 said they planned to shift some of their production and sourcing to different countries within the next five years.

BCG says trade between the US and Mexico stands to grow by 300 billion in the coming decade.

The automotive and machinery sectors have been the primary drivers of export growth, according to BCG, but other markets like household appliances, power tools, and medical devices have potential to scale.