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As of July this year, Mexico made up more of US imports than China did. And as the US

seeks to rewire global trade, Mexico could become the biggest beneficiary of

these changes. Starting in 2018, the US administration imposed several rounds of tariffs on China

and other US trade partners as part of Trump's America first economic policy.

The aim was to reduce the US trade deficit by shifting American trade policy from multilateral

free trade agreements to bilateral trade deals.

This round of tariffs was the first volley in the US-China trade war.

Chinese goods suddenly got a lot more expensive for Americans and so they went shopping

for goods from non-tariff countries that now appeared more affordable.

For American manufacturers, the attraction of moving production from China to Mexico seemed obvious.

Mexico offered a skilled workforce, good IP protection, good transportation infrastructure,

a huge shared border with the United States, an established export industry and privileged

trade access. This seemed to be a once-in-a-lifetime

opportunity for Mexico, perhaps even more promising than the signing of the North America

Free Trade Agreement had been in 1994. It didn't really work out though. Between 2018 and 2021, the proportion of manufactured goods

imported into the United States from Mexico rose a bit, but the big winners in global trade

were low-cost Asian competitors, including Vietnam and Taiwan.

Asian countries, other than China, increased their share of US manufactured goods imports

from 12.6% to 17.4% over that period.

The Biden administration retained most of Trump's tariffs when they took power, altering

...