Mexico is now the top supplier of products to the US

It is the first time in more than twenty years that Mexico has passed China as the country sending the most goods to the US. It's because of rising tensions between the US and China and the US's efforts to buy things from friendlier, closer countries. China's imports to the U.S. dropped 20% to $427 billion in 2023, while Mexico's imports went up almost 5% to over $475 billion. Mexico's imports were bigger than China's for the last time in 2002.

US-China Trade Relationship:

This year, trade disagreements and military actions by Beijing have made it harder for the US and China to do business together. As president, Biden kept the taxes that Trump put on goods from China in 2018. The Biden administration has advised businesses to find sources in friendly nations or bring production back to the United States to avoid sending work to China. In addition, companies looked for suppliers closer to the United States since the COVID-19 outbreak harmed supply lines.

Mexico's Trade with China:

Mexico has benefited from ending its ties with Chinese plants, but the situation is more complicated than that. Fewer restrictions on the free flow of goods between the United States, Mexico, and Canada have led some Chinese companies to set up factories in Mexico. The biggest drop in China's U.S. imports was in highly sensitive goods like computers and technology and chemicals and pharmaceuticals.

Mexico is now the top supplier of products to the US, surpassing China
Analyst Derek Scissors believes that the fact that the U.S. is buying fewer Chinese goods shows that people are wary of President Xi Jinping's economic policies in Beijing. United States businesses are scared about Xi's strict COVID-19 lockdowns and investigations into foreign companies. According to Derek Scissors, the change in Chinese goods to the U.S. is not just a one-year coincidence. Some places might not want to recover in the future, which could be a problem for the U.S.

In the end, the U.S. trade deficit in goods shrank by 10% in the past year, leaving a $1.06 trillion hole. The country's trade with other countries is getting better.