Top Products to Source from Mexico
Mexico is an integral part of the U.S. economy and soon may become the U.S.'s largest trade partner. With nearly $1.7 billion in products and services crossing the U.S.-Mexico border every day, Mexico’s influence in the American economy grows every year.
As the manufacturing industry continually shifts to near-shoring operations in Mexico from China, the preponderance of products made in Mexico is steadily increasing. As a consumer, the first concern is whether or not the quality of the product made in Mexico is commensurate with those made in the United States and China. In addition to this, it is important to consider the top industries thriving in Mexico and the companies behind the success.1
As the trade war with China intensifies, Mexico is vying to become our single-largest trading partner. And an update to the transformative North American Free Trade Agreement, which made Mexico the keystone of many American companies’ production processes. Increasingly, the U.S. relies for a significant percentage of its imports from Mexico, as evidenced by the below graph:
Since goods tend to cross the border multiple times – about 40% of US imports from Mexico and 75% of US exports to Mexico are intermediate goods – the duties represent a significant risk to business activity both north and south of the border.2
Quality of Products Made in Mexico
Due to the Maquiladora program, an increasing number of businesses have moved their manufacturing in order to gain cost savings, and many have found that in doing this they have also procured a higher quality product as well. This is due in part to the presence of an increasingly skilled workforce that has developed as a result of the booming Maquiladora program over the past 50 years. One of the main benefits of maquiladoras in Mexico includes the ability of the skilled workforce in Mexico to quickly adapt to innovations and technological advancements, making them an incredible asset to American businesses looking to save money on the cost of manufacturing, while still producing a high-quality product.3
Top Product Exports From Mexico
The U.S. imported $372 billion worth of products from Mexico in 2018, more than our trade total with Canada. Topping the list are cars and vehicles, with the U.S. importing $93 billion worth of cars or car parts last year, including $22 billion worth of car engines, $5 billion in car seats and $5 billion in chassis.4 Second to cars is tech equipment, including $26 billion of computers and computer parts, semiconductors and software. Americans also imported $6.7 billion worth of vegetables and $5.3 billion of fruit and nuts from Mexico.
The following six categories show how far Mexico’s reach into the U.S. has grown over the years:
Mexico produces 16 out of every 100 cars sold in the United States. Furthermore, Mexico became the United States’ first automotive supplier since 2019. Automobile manufacturers such as General Motors, Nissan, FCA Mexico, Volkswagen, KIA, Mazda, Toyota, Audi, and Honda have long been established in different cities of Mexico. Imports have decreased in recent times as a result of the worldwide covid-19 pandemic, but this industry is expected to rebound soon.5
At $93 billion, cars or car parts were almost a quarter of all goods coming into the U.S. from Mexico in 2018. This includes $22 billion worth of car engines, $5 billion in car seats, and $5 billion in chassis. American automakers like General Motors (GM) and Ford (F) have plants in Mexico. Most of the cars and car parts that the U.S. imports from Mexico are made by American automakers and intended for the U.S. market., even though they are manufactured in Mexico.
- Electrical Machinery & Equipment
Nearly $64 billion of U.S. imports in 2018 were smaller electric appliances like phones, televisions, vacuum cleaners, and parts. This includes $26 billion of computers and computer parts, semiconductors, and software.
Our society depends on electronics more and more as the years go by. What many people don’t realize is that we get a lot of our electronics from Mexico. A lot of computers, monitors, and telephones come from across the border, and the country spends billions of dollars each year to make this happen. We also get appliances like refrigerators and air conditioners from Mexico, and we spend a few billion on these appliances as well.
- Machinery & Mechanical Appliances
The U.S. imported $63 billion worth of goods in this category in 2018. Mexico is a huge producer of home appliances, including washing machines, refrigerators, and air conditioners. Between 30% and 44% of the U.S.' imports in this category come from Mexico every year.
- Agricultural Products
Mexico is the second-largest supplier of agricultural products to the United States. We spend almost two billion dollars on tomatoes alone, but we also get vegetables like berries and avocados. We also get snack food as well as processed fruit and vegetables.
Mexico is the biggest source of all agricultural imports for the U.S. In 2018, this included $5.9 million of fresh vegetables, $5.8 billion of fresh fruit, $3.6 billion of wine and beer, $2.2 billion of snack foods, and $1.7 billion of processed fruit and vegetables. Avocados, tomatoes, onions and bell peppers are popular vegetable imports from Mexico. The U.S. imported $2.3 billion of tomatoes and $1.7 billion of avocados from Mexico in 2018. The U.S. also imported $3.5 billion of beer, including the Mexican beers the country is renowned for, such as Corona, Dos Equis and Modelo, and the many tequilas for which the country is renowned. Mexico also supplies the U.S. with the many tequilas for which the country is renowned.6
- Mineral Fuels
Despite being one of the largest crude oil producers in the world, U.S. consumption exceeds domestic production. In 2018, the U.S. imported $16 billion of mineral fuel from Mexico. This category includes coal, petroleum, and natural gas.
- Medical Instruments
The $15 billion in imports under this category includes instruments used in surgeries and medical procedures.
Mexico is Latin America’s leading exporter of medical devices and a major supplier to the United States. According to the Observatory of Economic Complexity (OEC), the nation exported close to $11.7 billion in medical devices in 2019, placing it as the world’s eleventh largest exporter.
The Future of U.S. Imports From Mexico
Due to COVID-19-related disruptions to global trade, Mexico withstood one of the deepest year-over-year reductions in imports to the U.S. in the first half of 2020. However, given Mexico’s steady position as one of the United States’ largest importers over the past five years, it’s likely that it will remain a prolific trade partner for years to come. The Biden presidential administration considers the USMCA, the trade agreement binding the U.S., Mexico, and Canada, as “gold standard” policy in terms of trade law enforcement, labor rights, and the environment. Based on historical trade data, it also seems likely to remain the largest U.S. importer in Latin America.7
At Exporta Wholesale, we aim to facilitate the increasing transition of US buyers near shoring their manufacturing operations to Latin America. Exporta provides U.S. buyers access to hundreds of manufacturers in Mexico, all of whom are pre-vetted to ensure high quality standards for our carrier partners. For more information on how to use Exporta to connect with Mexican manufacturers, check out our recent blog post.
Latin America is poised to become a regional manufacturing powerhouse during the next century thanks to robust demographic trends, a skilled and young labor force, and an increasingly market-oriented approach to global trade.
About Exporta Technologies
Exporta Wholesale is the largest marketplace connecting suppliers in Latin America with buyers in North America. Today, we have a network of over 5,000 Latin American suppliers serving a variety of consumer goods and product categories in the United States.
Exporta’s marketplace offers buyers a full service experience in the origination, sourcing and managing of products. The platform was founded on the idea that curation and service are the most important elements in the buyer’s journey. Exporta’s marketplace is building technology that addresses the pains of sourcing products internationally at attractive prices.