Mexico’s Top Exports to the US: Harmful Drugs, Trafficked Children and Nuclear Garbage
These Are Mexico’s Top Exports
by Tyler Durden
Jan 27, 2017 2:30 PM
While readers are aware by now of the intricate trade link that binds Mexico to the US, it is more than merely autos and avocados. As the chart below shows, of the $302 billion in total Mexican exports (offset by $179 billion in imports), the largest two categories were electrical machinery & equipment, followed by nuclear reactors, boilers machinery & equipment, with motor only coming in third spot. But no matter the breakdown in categories, one thing is clear: Mexico needs the US – which imports over 80% of Mexico’s net exports – and the NAFTA agreement far more than the US does (which is not to say that the US won’t be impacted once NAFTA is eliminated).
Here are some further thoughts from SocGen’s Dev Ashish on the trade relationship between Mexico and the US:
Apart from the rhetoric coming out of the US in the past two-three months, particularly after the US election results, this week’s executive order by President Trump, essentially pulling the US out of the TPP trade agreement, has removed some of the uncertainty over the trade and investment outlook for Mexico. To a large extent this was already priced in by the market and few were hopeful of the deal going through under the new US regime.
What has become a greater uncertainty now is the likely path and shape of NAFTA. As we have said in the past, NAFTA has considerable value for the Mexican economy. Mexico’s exports to the US over past 12 months were at USD302bn or 81% of its total exports. During the same time, however, Mexico’s imports to the US were USD178.9bn or 46% of Mexico’s total imports. Mexico runs a trade surplus of nearly USD123bn with the US while it runs significant trade deficit with rest of the world.
Put simply, trade with the US has profound implications for Mexico’s investment and overall growth outlook. In a situation when the rhetoric is fast threatening to become reality, the impact of a possible change in the NAFTA provisions for Mexico can’t be overstated.
This is precisely what Trump was relying on when he called Pena Nieto’s bluff yesterday. And despite the fireworks, eventually, Mexico will have to come to the negotiating table as otherwise a substantial percentage of Mexico’s total annual exports, shown below, will suddenly find themselves with no willing buyer. Here is a list of the Top Mexican exports in the past year: