In 2003, China surpassed Mexico as the largest exporter of goods to the US. However, in recent years, Mexico has begun to regain ground. According to Bloomberg Businessweek, while in 2018 China exported US$200 billion more to the US than Mexico, between June 2021 and June 2022 the gap narrowed to US$130 billion. The reason? To a large extent, China itself. The restrictions imposed on Chinese-US trade by the trade war unleashed by President Donald Trump in 2016 have led many Chinese manufacturers to set up shop in other countries in order to export to the US. Thailand and Vietnam have been two of their favorite destinations, but Mexico has also been able to become part of the strategy to maintain market share in the US despite the tariff war. 

The numbers speak for themselves. With ups and downs, net investment from China and Hong Kong in Mexico has gone from US$65 million in 2013 to US$493 billion in 2021, according to figures from the Mexican Ministry of Economy. 

Mexico's main advantages are its proximity to the US market and the free trade agreement it has with the US and Canada (USMCA).. Its disadvantage lies in the limitations of its local supply chain to meet the rules of origin required by the USMCA.

Annual net investment in Mexico from China and Hong Kong

(US$ millions)

Source: Mexican Ministry of Economy.