Mexico

Natalie Hanson         
(202) 205-2571
Natalie.Hanson@usitc.gov

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Change in 2017 from 2016:

• U.S. total exports to Mexico: increased by $13.3 billion (5.8 percent) to $243.0 billion
• U.S. general imports from Mexico: increased by $20.0 billion (6.8 percent) to $314.0 billion
• U.S. trade deficit with Mexico: increased by $6.7 billion (10.4 percent) to $71.1 billion

U.S. Total Exports

U.S. total exports to Mexico^[1] increased by $13.3 billion (5.8 percent) in 2017, from $229.7 billion in 2016 to $243.0 billion. In 2017, U.S. exports grew in 8 of the 10 merchandise sectors covered by this report. The largest increases by value were for energy-related products (up $7.0 billion, or 35.8 percent) and chemicals and related products (up $2.2 billion, 6.7 percent). In 2017, U.S. total exports to Mexico in transportation equipment also increased by more than $1.2 billion (3.0 percent). The largest decrease in value of U.S. exports to Mexico occurred in electronic products (down $502.8 million, 0.9 percent). Despite this decrease, electronic products such as computers, telecommunications equipment, consumer electronics, and video monitors remain the top U.S. exports to Mexico, accounting for more than one-fifth of all U.S. exports to Mexico in 2017.

Table MX.1: Mexico: U.S. total exports, general imports, and merchandise trade balance, by major industry/commodity sectors, 2013–17

Source: Compiled from official statistics of the U.S. Department of Commerce.
Note: Import values are based on customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data. Sectors are ordered by the level of processing of the products classified therein.

With respect to energy-related products, Mexico was the largest market for U.S. refined petroleum products, receiving over one-half of U.S. gasoline exports and the largest share of U.S. diesel exports in 2017.^[2] Two factors in particular have increased Mexican demand. First, Mexico has been phasing in reforms to its energy sector and in 2016 began allowing companies other than state-owned Petróleos Mexicanos (Pemex) to open retail stations and import refined petroleum products. Second, Pemex’s refineries have also been suffering from power outages and running at low utilization rates, reducing domestic supply.^[3] Consequently, the value of U.S. exports of refined petroleum products to Mexico increased by $5.6 billion (35.5 percent) in 2017 to $21.5 billion. Much of the increase in the value of these goods can be attributed to an increase in the price of crude oil from 2016 to 2017.^[4] In volume terms, U.S. exports of refined petroleum products to Mexico rose from 278 million barrels in 2016 to 337 million in 2017 (a 21.3 percent increase).^[5]

Table MX.2: Mexico: Leading changes in U.S. exports and imports, 2013–17

Source: Compiled from official statistics of the U.S. Department of Commerce.
Note: Import values are based on customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data.

In an effort to shift away from oil-driven power to lower-emission sources of energy, Mexico continues to invest in gas-fired power plants and in developing high-capacity natural gas pipelines. However, limited storage capacity and delays in the build-out of new pipeline infrastructure leave Mexico dependent on U.S. natural gas exports.

In 2017, with demand continuing to grow, Mexico continued to import large quantities of natural gas from the United States, both in its gaseous state (“gas-state”)—imported via pipelines from Texas and other border states^[6]—and liquefied. While U.S. exports of gas-state natural gas remained more or less stable from 2016 to 2017 ($2 billion), U.S. exports of liquefied natural gas (LNG) climbed by $476 million (80 percent) to $597 million in 2017. Indeed, Mexico was the largest market for U.S. LNG, receiving 20 percent of total U.S. LNG exports in 2017. ^[7]

As with refined petroleum products, U.S. exports of certain chemicals and related products that are derived from petroleum benefited from the recovery in crude oil prices in 2017. The value of U.S. exports to Mexico of petrochemicals and the related plastics sectors increased from 2016 to 2017. In particular, U.S. exports of certain organic chemicals, including ethylene glycol (ethanediol)^[8] and methyl tertiary-butyl ether (MTBE),^[9] increased by $729.9 million (25.2 percent) from 2016 to 2017. U.S. exports to Mexico of other plastics in primary form increased by $303.9 million (10.5 percent) from 2016 to 2017.^[10]

The value of U.S. exports of internal-combustion piston engines, an automotive part that is the United States’ leading transportation equipment export to Mexico, increased by $1.1 billion (17.1 percent), from $6.5 billion in 2016 to $7.6 billion in 2017. Under the North American Free Trade Agreement (NAFTA), production sharing in the automotive industry has created a highly integrated regional supply chain among the United States, Canada, and Mexico, where parts are produced and shipped from one country to another for assembly into complete automobiles, the vast majority of which are then sold in the United States.^[11]

Also within the transportation equipment sector, U.S. exports of aircraft increased by $748.1 million (24.7 percent), from $3.0 billion in 2016 to $3.8 billion in 2017. In particular, U.S. exports of civilian aircraft increased by $556 million (17 percent)^[12] and U.S. exports of military helicopters increased by $267 million (73 percent) in 2017.^[13]

U.S. General Imports^[14]

U.S. general imports from Mexico increased by $20.0 billion (6.8 percent) in 2017, from $294.1 billion in 2016 to $314 billion in 2017. The value of these imports grew in all 10 merchandise sectors covered by this report. The largest absolute increase was for imports of transportation equipment ($9.0 billion, 8.5 percent), while the largest relative increase was for imports of energy-related products ($2.4 billion, 27.6 percent).

Motor vehicles continued to be the top U.S. imported product from Mexico, valued at $57.9 billion in 2017, an increase of $7.9 billion (15.8 percent). Mexico was the leading supplier of motor vehicles to the United States (including both U.S.-headquartered firms and major non-U.S. vehicle firms), providing 27.7 percent of total U.S. imports in 2017. The United States also imported $13 billion of certain motor vehicle parts from Mexico in 2017, a slight decrease from the $13.5 billion imported in 2016. Taken together, motor vehicles and certain parts accounted for 23 percent of all U.S. imports from Mexico ($70.9 billion).

U.S. Merchandise Trade Balance

The U.S. trade deficit with Mexico grew by $6.7 billion (10.4 percent) to $71.1 billion in 2017, as the increase in U.S. imports (primarily motor vehicles) outpaced growth in U.S. exports. This was true even though exports of motor vehicle engines accounted for a $1.1 billion increase in those exports. The trade deficit overall, and the auto sector in particular, have been cited among the primary incentives for the United States to closely examine and potentially update or renegotiate certain provisions of the NAFTA with Mexico and Canada.^[15] Of the merchandise sectors covered by this report, the largest deficits were for transportation equipment ($73.0 billion), electronic products ($22.7 billion), and agriculture ($7.4 billion). The largest surpluses were for chemicals and related products ($23.6 billion) and energy-related products ($15.5 billion).