During the past 15 years, trade in goods between the US and Mexico has more than doubled, strengthening Mexico’s position as one of the US’s leading trading partners. The US now conducts more trade with Mexico than ever before, while running a significant trade deficit.
Vanessa Rubio-Márquez, associate fellow in the US and the Americas programme at Chatham House, notes that US investment represents 45% of total investment in Mexico and more than 80% of Mexican exports go to the US. Moreover, Mexico ranks among the top three largest markets for 35 US states.
The trade in this corridor is dominated by deeply integrated manufacturing sectors, especially autos, electronics, machinery and medical devices. Vehicles and auto parts are Mexico’s top exports to the US, with a supply chain where components move multiple times across the border. A milestone of the evolution of trade framework across this corridor was the introduction of the US–Mexico–Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (Nafta) in 2020. It redefined auto content rules, added enforceable labour and environmental standards, and modernised digital trade provisions. The agreement includes a six-year review clause, which is expected to be used by the Trump administration as a leverage.
