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Why U.S. Trade With Mexico and China Could Not Be More Different

A tale of two trading partners

No matter how you stack it, Mexico is a better trading partner than China
Credit: Blake Thornberry

Adams Nager
Mon, 02/27/2017 - 12:02
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Depending on whom you ask, it’s either the best of times or the worst of times for global trade. Protectionists villainize trade as damaging to U.S. workers, while on the other side of the coin, pure laissez faire free traders consider trade as a pure positive for the United States.

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Mexico and China frequently are labeled as scapegoats for U.S. manufacturing decline. Partially, this is because Mexico and China are currently our top two trading partners, comprising 15 percent and 17 percent of U.S. global trade volume, respectively. In addition, both have lower labor costs than the United States, so the perception is that they have an unfair advantage that leads to a “giant sucking sound” from offshored jobs.

However, losing a job to China is much more damaging for the United States than losing a job to Mexico for three main reasons: The United States and Mexico have conjoined and complementary supply chains in many industries; Mexico generally plays by the rules, while China willfully ignores international trade agreements; and trade with Mexico does not aggressively grow the U.S. trade deficit. I’ll break each of these down.

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Comments

Submitted by Flavien on Fri, 03/03/2017 - 11:33

If the federal government

If the federal government spends  it  political capital on fighting Mexico

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