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latinometrics OP t1_jdhic1y wrote

From our newsletter:

It may seem unbelievable, but Mexico's leading trading partner is not the US per se, but Texas. In fact, in 2022, Mexico traded more with Texas ($286B) than it did with all of Asia ($262B) and six times as much as it did with all of Latin America ($48B).

It's no longer news to most that nearshoring has taken Mexico by storm following COVID-19. International consumer goods companies and vehicle manufacturers are moving production to the country's northern states. Big news came from the state of Nuevo Leon as Tesla announced a new Gigafactory in its capital city of Monterrey. However, most may not know that even Chinese companies are now choosing to manufacture in Mexico instead of China!

As of 2021, China's GDP per capita was 25% larger than Mexico's ($12.5K vs. $10K). China's official minimum wage ($377/Month) is now larger than Mexico's ($234/Month). The assumption that Chinese labor is cheap by definition has changed in recent years. Also, the disruptions to the global supply chain from the pandemic and the Suez Canal blockage have raised concerns about the risks associated with manufacturing predominantly in Asia to provide for a US consumer market. In addition, the imposition of tariffs on about 66% ($300B) of Chinese goods imported to the US that the Trump administration set are still in effect. Meanwhile, the USMCA trade agreement guarantees little to no tariffs between Mexican and US entities.

The nearshoring craze in Mexico seems to be here to stay. So long as the US remains a large consumer market, the world will adapt to sell to it. Meanwhile, the decay in international relations and the fear of further supply chain complications have turned the dial back to when trading overseas was risky and unattractive.

The "Made in China" days may be behind us, and, as Nuevo Leon's governor, Samuel Garcia, recently stated regarding the new line of Tesla vehicles built in his state, these will hit the market branded as "Made in Nuevo Leon."

Tools: Rawgraphs, Affinity Designer, Sheets
Sources:

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TrustM3ImAnEngineer t1_jdhj8xn wrote

I’m assuming Texas may be the crossing point but the final destination of the goods has to be all over the US.

Edit: after a simple google search, the 2022 trade between the US and Mexico was $780 billion. This chart makes more sense to me now.

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Ahab_Ali t1_jdhm0hf wrote

And that is just avocados and Roma tomatoes!

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kingofwale t1_jdho2w6 wrote

I also buy more stuff from my local store I can walk to, than a store I have to take a bus to…

Same logic.

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mac4281 t1_jdhpsih wrote

Damn that’s a lotta drugs!

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Starbucks__Lovers t1_jdhsshi wrote

That explains why my chips and salsa in Vietnam was triscuits and tomato sauce

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tilapios t1_jdhvu00 wrote

It's as if Mexico and the US have a shared border and a free trade agreement.

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Lvl7King t1_jdhvvsg wrote

Thanks in large to the USMCA Trump trade deal.

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Pr1ebe t1_jdhwo2c wrote

Replying to rtakehara (#2,335,507)

Yeah, not really getting what the title is supposed to be telling us that we can't clearly see lol. It looks like Mexico trades with Texas more than anything else graphed

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Temporary-Alarm-744 t1_jdhzovx wrote

Replying to No-Calendar-1534 (#2,335,875)

He's not wrong. In 2019 there was a mass shootings targeting Mexicans in El Paso after abbot sent off campaign emails talking about Mexicans are invading. His response was the equivalent of"and? Get back to work you fucking Mexicans". I wouldn't call the relationship partners. More like nation state indentured servitude. Hell if Abbot ever became president I wouldn't be surprised if he coup'd Mexico just for the lulz

−3

capsaicinintheeyes t1_jdi0yp7 wrote

Replying to Lvl7King (#2,336,047)

I thought I remembered a bunch of sound and fury followed by the passing of a bill that was 99% pre-Trump NAFTA...but that's not to say there was nothing new in there that may have helped our trade I vaguely remember for the Mexican side something about insisting on minimum wages being higher for manufacturing cars that would be sold in the US, so either Mexican workers get a raise, US workers become more competitive, or both...which all seems win-win-win to me.

How does the data on OP's graph compare to the years before Trump's revisions passed, tho? I wouldn't know where to begin

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ExecTankard t1_jdi14p4 wrote

Of course because established business overland

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CountVampaDantes t1_jdi4ovo wrote

And half of this trade is H-E-B.

The other half is 🎼Avocados from 🎵exico 🎶

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headphonz t1_jdi9nbb wrote

yeah... uhh. no they don't. That's because Title of export product is changing hands in Texas from a US or Canadien seller to an exporter who then transfers or does end to end deliveries in Mexico.

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nim_opet t1_jdic9bo wrote

Makes sense, though it’s actually the US, no?

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Dm1185 t1_jdidquu wrote

It’s like Mexico and Texas border each other.

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Chambawamba1995 t1_jdilab1 wrote

But their president wants to divorce with USA and lay down under China

−5

DrPeGe t1_jdim0rm wrote

I've been to El Paso/Juarez a LOT. I wonder if this includes the truckloads of goods bound for the US that go through texas? As an example, electrolux builds appliances (largest appliance maker in the world with multiple brand names, Swedish company) in Juarez that pass into el paso, and then distribute across the U.S... Just a thought.

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DecisivelyArbitrary t1_jdinl4p wrote

Im just going to scroll through the comments to see if someone posted the tasteless joke I thought off. Cant take that heat, myself.

−2

[deleted] t1_jdinr5x wrote

The majority of people from the rio grande region (like me) love Texas and americanized culture

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PwnanyGaming t1_jdinxf5 wrote

It's funny that China is the "big bad" but all the Republicans who wanted that wall to keep the evil Mexicans out are benefitting from those same Mexicans they wanted out - while China isn't benefitting them whatsoever, but does sell cheap products at least.

If anything, data such as this should help reinforce the relationship with Mexico and use it to both country's advantages.

But you know, build more of a wall and buy pencils from China instead.

−7

MedioBandido t1_jdiofwc wrote

From the geography northern Mexico, it makes a lot of sense. Places like San Antonio and Laredo are further south than Mexican cities such as Hermosillo and Chihuahua.

Our California biz exports to Mexico and we still ship everything to freight forwarders in TX first. It is more efficient to ship on rail to Laredo, then truck it into Mexico City or wherever than to truck it from California directly.

Laredo is like half as close to CDMX as San Diego is.

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MedioBandido t1_jdipgj3 wrote

Replying to 6158675309 (#2,338,645)

Yes to an extent. It’s not 1:1. There’s a pretty convoluted formula used to determine country of origin depending on where the components come from. If you shipped 100% of components to Mexico where you glued them together, I don’t think you’d get away with an Hecho en Mexico.

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tylorr83 t1_jdisnkw wrote

All the street racers going into Mexico have really helped Texas and Mexico's trading!

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Arbiter51x t1_jdiuv45 wrote

Odd that Canada did not appear on this chart.

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ArcaneDanger t1_jdiyprr wrote

Almost as if…they’re right next to eachother

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EggCouncilCreeps t1_jdizrju wrote

Length of border vs. something something. Ease of trade and access to port facilities.

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RandoCalrissian11 t1_jdj18do wrote

Replying to EggCouncilCreeps (#2,340,528)

It’s called Lotus Thai in Rocksprings, Tx. About 2.5hr west of San Antonio in the middle of nowhere. Usually served American, you can also get each dish Thai hot (extra spice). Nothing is too hot. It’s not a large menu, it’s one Thai lady as the cook, one helper, and one server make up the entire restaurant, but the food is so fresh and delicious I always eat there 1-3 times a trip. Lunch only also.

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TexasTwing t1_jdj4p00 wrote

Replying to TrustM3ImAnEngineer (#2,334,590)

Nope. Texas exports to Mexico include oil and gas, chemicals, nuclear reactors, iron, steel, plastics, and copper. Mexico’s exports to Texas include nuclear reactors, plastics, oil and gas, furniture, fruit, and nuts. Both are over $100 billion in each direction.

Texas’ GDP is 45% more than Mexico’s, so it’s not unreasonable for two neighbors to have so much trade.

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series_hybrid t1_jdj7otc wrote

You know those hemi engines in the "made in America" Chargers and Dodge ttrucks?

The hemi is made in Saltillo Mexico

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Aggravating_Reading4 t1_jdj9im4 wrote

It will continue to grow as the US becomes more crippled by stupid people

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Tallen122 t1_jdj9nrp wrote

It’s almost like they’re directly connected with a superpower or something

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Dks_scrub t1_jdjctbx wrote

It’s very funny Americans and American politicians are sometimes suspicious that Mexico is plotting to ‘retake Texas’ when the reality is that north Mexico is slowly morphing into south Texas, not the other way around.

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Sevinki t1_jdjeybd wrote

pssst, dont come here with „facts“ and „reality“.

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6158675309 t1_jdjjh9h wrote

Replying to MedioBandido (#2,339,339)

Yeah. I’m not sure for country of origin. I will see if I can find it. I was listening to a podcast and it was about Chinese firms buying up massive sites for factories in Mexico to get around US tariffs.

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pedroari t1_jdjk3yh wrote

Well, the cocaine going to Hollywood is offbook

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LightningCozy t1_jdjkhan wrote

Not surprising. I live in Texas. We are right next door to each other! We have been big trade partners for a very long time.

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mrsprinkles565 t1_jdjm3o3 wrote

These metrics are most certainly port of entry based and therefore Texas represents USA.

−1

nirad t1_jdjp6pn wrote

Does AMLO know this? He doesn't act like it.

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Otherwise_Toe_4145 t1_jdjrgk0 wrote

Replying to kingofwale (#2,335,154)

That's not exactly right. Maybe the store on the other side of the world is cheaper / has more goods. Case and point: Brazil biggest trade partners are China and the US and not its neighbors (although to be fair, Argentina comes 3rd)

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PB4UGAME t1_jdjs1kg wrote

Replying to Pr1ebe (#2,336,135)

Perhaps the title it trying to highlight that a single state of one country accounts for more trade than an entire continent and a multitude of countries that when combined still only make up Mexico second biggest trade partner?

They could have done the US in its entirety, but then it would be nearly ~$800b and would dwarf every other trade partner; or they could have compared it to all of North America, which isn’t that much different from just using all of the US—but when you look at just Texas, its still the single largest trade partner, ahead of the entire continent of Asia, but its a bit closer and more comparable while still highlighting the extreme difference in trade volume.

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Mas_Madk t1_jdjuanh wrote

In a similar situation with China and Tiwan..

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llamapanther t1_jdjyg5s wrote

This is not surprising nor beautiful data wtf? Not like Texas and Mexico shares a border with each other🤯I'm actually only a bit surprised about the fact that Asia is that close.

0

epanek t1_jdkddiz wrote

Good. Intl globalization served its purpose. Let’s move on from Asia

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Thug_shinji t1_jdkjt9y wrote

Fun fact mexican labor is bow cheaper than chinese and more skilled. Mexico is one of the healthiest demographics globally of any country.

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TexasAggie98 t1_jdkk0tn wrote

And just think, this doesn’t include the billions and billions in drugs, cash, sex slaves, and guns that cross the border illegally or the millions of illegals.

Legally and illegally, Texas and Mexico are joined at the hip economically. It is in all of interests for Mexico to restore the rule of law and civil society so that these trade values can go even higher.

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OneWorldMouse t1_jdkm31s wrote

Asia is like 48 countries... this is a very strange chart.

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yvel-TALL t1_jdkmeo4 wrote

Yah, we should look into increasing the Mexico-Asia border in order to rectify this, Texas has a very unfair advantage of hogging over a third of Mexico's border!

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R0GERTHEALIEN t1_jdkp63s wrote

That's crazy I mean Texas is soo far from Mexico. O wait, it's right fucking there and has a huge economy

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Electronic_Permit300 t1_jdks6oi wrote

I mean the Cartels make a ton of their profits with drug smuggling and human trafficking through Texas & Arizona.

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bgd73 t1_jdksphm wrote

my first and last time trying tequila was texas.. got the real deal I guess.

mezcal, lots of fruits...corn..

Texas has a great neighbor.

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phoncible t1_jdkv3u6 wrote

This shouldn't be that surprising. I believe Australia trades more with China than with the West, and that's mainly due to proximity. Never underestimate the value of just being close.

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WishGullible5142 t1_jdkv95j wrote

Mexican here, we do not trust Latin American countries, and not even Latin American countries trust each other. Otherwise, we would be a second EU or NATO.

Not only that, but the dollar is a good stable currency for the most part, so it is always in demand

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SerialPhilanderer t1_jdkyczd wrote

Replying to kingofwale (#2,335,154)

Right - the main take away is how much trade comes from Asia despite the Pacific Ocean being in the way.

Makes you wonder how much more business the US and Mexico could be doing if it weren't for the political barriers.

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Yvaelle t1_jdl3zn9 wrote

For a more extreme example, BC does more trade with 4 US states (California, Washington, Oregon, New York), than it does with its only neighboring province (Alberta).

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ADIDASects t1_jdleiuc wrote

But Texas told me Mexico bad must build wall???

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mfomatratzen t1_jdlr2iz wrote

And then there’s the UK, believing it will trade more with Australia than with Europe.

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mfomatratzen t1_jdlr969 wrote

Replying to WishGullible5142 (#2,347,728)

As a Latin American I agree. Our young countries can’t stand each other. We either integrate like the EU, after decades of war, or it will take more than El Chavó and Betty la fea to have a more sense of shared belonging.

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Hilife5 t1_jdlxn8u wrote

Those quick trips to Wally World from Juarez add up

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cybercuzco t1_jdm4k9o wrote

Makes sense, Texas was a Mexican state until it seceded because white illegal immigrants from America wanted slavery, which the Mexican government had outlawed. These American-Mexican immigrants then called on the United States to invade to protect “American interests” aka slavery which the Americans obliged to do. And that’s why we remember the Alamo.

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iwouldhugwonderwoman t1_jdmox4y wrote

Replying to TheLizzardMan (#2,337,377)

This is what my company has.

We have a manufacturing facility across the border in Mexico and a couple warehouses in Texas. We import the parts from Mexico, to the Texas warehouses and then route them to the appropriate manufacturing facility in the USA (not Texas) so they can be used in the higher level assembly.

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