Mexico Trading Partner Portal

Trading Partner Portal: Mexico

Overview

Guest Commentary: Perspective on Impact of New U.S. Tariffs on Mexico
Christian Tonatiuh González Jiménez, Consul General of Mexico in Sacramento, March 4, 2025

Trump Tariffs: Some Put on Hold, Others Take Effect
CalChamber, February 4, 2025 

Trump Tariff Plans Cause Concern, Much Speculation
CalChamber, January 31, 2025 

Trade Overview

usa_mexico_ca_flagsMexico is the third largest country in Latin America, with the U.S at its northern border and Guatemala, Belize, and majority of Latin America to the south. It is the largest Spanish speaking country in the world, and is culturally, ethnically and regionally diverse, with many cultural influences, but a majority coming from its indigenous heritage. Britannica

Mexico has a population of 131.2 million, with around 80% of its population in urban areas and 45% of its population under the age of 25.  Its nominal GDP is over $1.81 trillion as of 2023, with GDP per capita at $13,804. Mexico currently has an unemployment rate of around 2.9% and an inflation rate of 5.5%. Over $63.7 billion in remittances flowed into Mexico in 2023, 7.6% more than the year prior, setting another record and making it the second country in the world with the most remittances. Mexico is ranked #51 in world competitiveness by the World Economic Forum, and 126/180 for perceptions of corruption by Transparency International.

It has a developing market economy that has close ties with the U.S. and has ranked as the 14th largest economy in the world, and the 2nd largest economy in Latin America. It typically shows slow, stable economic growth, and has kept this trend since the 1990’s. This is mostly due to its high rate of labor informality, poverty, and decline in oil production, with labor informality being 56% and poverty at 44% as of 2023. It is considered upper middle-income member of the Group of 20 or G20 and the Organization for Economic Co-Operation and Development (OECD). U.S. Department of Commerce

U.S.-Mexico Trade

Mexico is the United States’ southern neighbor and second largest bilateral trading partner. In the last few decades, two-way trade in goods between Mexico and the United States increased dramatically from $81.4 billion in 1993 to $797.96 billion in 2023, up from $661.16 billion in 2021. Since 1995, Mexico has been a top trading partner for the U.S. and is the first or second largest trading partner for more than half of U.S. states.

United States’ exports to Mexico totaled $323.2 billion in 2023. Top export categories from the U.S. to Mexico included computer and electronic products ($45.3 billion), transportation equipment ($42 billion), petroleum and coal products ($38.6 billion), chemicals (31.2 billion), and non-electrical machinery ($25.7 billion).  There are over 50,000 small and medium sized enterprises in the U.S. that export to Mexico.

In this same year, imports from Mexico to the U.S. totaled around $475.2 billion. The top 5 imports being transportation equipment ($163.8 billion), computer & electronic products ($76 billion), electrical equipment ($43.4 billion), appliances & components ($29.4 billion), non-electrical machinery ($29.4 billion), and oil and gas ($19.8 billion).

2022 California Exports by Country - Top 10

California- Mexico Trade

Mexico is California’s top export market, purchasing 18.8 percent of all California exports. California exports to Mexico amounted to $33.3 billion in 2023. Total exports to Mexico consisted of computer and electronic products ($5.8 billon), transportation equipment ($4.2 billion), non-electrical machinery ($2.8 billion), processed foods ($2.2 billion), and electrical equipment, appliances & components ($2.1 billion) respectively.

California imported $61.5 billion in goods from Mexico in 2023. The top import categories were transportation equipment ($14.7 billion), computer and electronic products ($13.5 billion), agricultural products ($7 billion), electrical equipment, appliances & components ($5.1 billion), and miscellaneous manufactured goods ($3.6 billion). California was the third largest importing state for goods from Mexico in 2023.

According to Visit California, nearly 7.2 million people visited California from Mexico in 2023, spending over $4.5 billion. Mexico sends more visitors to California than any other country by a wide margin, about 48% of all Mexican visitation to the U.S. is in California. Approximately 530,000 traveled by air.

Foreign Direct Investment

U.S. foreign direct investment (FDI) into Mexico totaled $130.3 billion in 2022 and Mexican FDI into the US totaled $33.8 billion in the same year. In 2021, Mexican FDI into the U.S. supported 88,400 jobs and contributed a value of $1.4 billion to expanding US exports. The top industry sectors for Mexican FDI in the U.S. were: food and beverages, auto components, plastics, business services, communications, and software & IT services. Select USA

In California, the thirteenth largest source of FDI through foreign-owned enterprises (FOEs) is Mexico. In 2023, Mexican FOEs in California provided 15,845 jobs through 545 firms amounting to $1.71 billion in wages. The top jobs by sector are financial activities, retail trade, professional/business services, manufacturing, and wholesale trade (World Trade Center Los Angeles FDI Report).

Mexico and the World

In 2022, Mexico’s total exports with the world were $577.7 billion and was the 11th export market among world exporters. Total imports in this same year with the world came in at $604.6 billion, and Mexico ranked twelfth among world import markets. This was a significant increase from the previous year with an increase in exports to the world of roughly 16.8% and imports by 19.5%. A growing industry in Mexico has been its manufacturing sector, with it being the 6th largest automobile producer in the world. It has also seen growth in aerospace manufacturing, medical device manufacturing, electronics, appliance and furniture, agriculture, and more. SIXM, U.S. Department of Commerce

Mexico has one of the largest frameworks for free trade agreements with a total of 13 treaties that involve 50 countries from three continents representing 60% of the world’s GDP. More than 90% of Mexico’s trade is done under these treaties. Also, Mexico has 58 ports and terminals in the Pacific Ocean, 59 terminals in the Gulf of Mexico and the Caribbean, 49 custom offices, and 15 highway systems. In regard to human capital, Mexico has a young, productive, and skilled population; half of the population are 29 years old or younger, and 49% are in a productive stage in life. Each year approximately 1,700 people graduate from engineering schools, positioning the country within the first 10 in the OECD in this regard (www.gob.mx/sre 2022).

Mexico is a member of multiple multinational organizations including the G20, OECD, WTO, UN, and APEC. It has multiple free trade agreements and also holds 32 Reciprocal Investment Promotion Agreements that cover 33 countries. Mexico climbed four spots to become the No.11 destination in the world for FDI as of 2022, according to the United Nations Conference on Trade and Development, with foreign investment to Mexico reaching $35 billion.

More Articles:

1810 – 2023, U.S.-Mexico Relations
Council on Foreign Relations

Governor Newsom Announces Binational Partnership with Mexico to Advance New Port of Entry at San Diego-Tijuana Border
Office of Governor Gavin Newsom, October 24, 2022

University Of San Diego Releases Report on California-Baja Economy
KPBS, February 21, 2022

Southern Connection: Innovation Clusters in Mexico and the Bridge to Silicon Valley
Bay Area Economy, June 2021

Interview Series Featuring California’s Key Trading Partners – Featuring Liliana Ferrer, Consul General of Mexico in Sacramento:
Ambassador Recaps Trade Pact Highlights, COVID-19 Impact, State Relationship
CalChamber, July 24, 2020

VIDEO in Spanish: Oportunidades para empresas socias | Doing Business in California – discussion with Carlos J. Valderrama, California Trade and Investment Representative Americas of the Office of Business and Economic Development of California
AmCham Mexico, September 9, 2020

The Baja California and Nuevo Leon Industry, Innovation, and Talent Clusters: Growing the California-Mexico Binational Economy
Bay Area Council, July 2020

Governor Newsom and Governors from Baja California States Re-Establish “Commission of the Californias
Office of Governor Gavin Newsom, December 4, 2019

Three California Governors Revive Cooperation Agreement
The San Diego Union-Tribune, December 4, 2019

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