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| Koreans and others are still doing alright in Mexico. Arguably even better in recent months. |
Let us first get an update on the state of Mexican exports to the United States--by far its largest export market. Buoyed by automakers setting up shop south of the border to manufacture automobiles and automobile components at significantly lower costs destined for the United States, it's become a key manufacturing hub for this industry. Consequently, Mexico is now the second-largest exporter to the US (China is tops) after
overtaking Canada. To an economist, it simply makes common sense. To the isolationist-protectionist, bunker-mentality specialist Trump, it's "stealing American jobs":
Mexico is overtaking Canada as the No. 2 exporter of goods to the U.S. this year, in a sign of how economic ties have deepened between the two countries even as the relationship is being questioned by President-elect Donald Trump.
Shipments from Mexico totaled $245 billion in the first 10 months of the year, according to Commerce Department figures released Tuesday, ahead of Canada’s $230 billion. If the trend continues, it would be the first time ever the U.S. bought more imports from its neighbor to the south. The two countries ended 2015 tied in exports to the U.S.
Now, more on all this Trumpery. All of Trump's over-the-top anti-Mexico rhetoric has sunk its currency, the peso, to very weak levels. Mexicans' worst fears came to pass with the US presidential elections that sunk the currency even further. All-time lows,
in fact. But, guess, what: just before Trump assumes office, Mexico has turned an expected trade deficit into a
surplus, with a weak currency contributing quite a lot. In large part, this unexpected
turn of events is due to his rabid anti-Mexico rhetoric about building a wall and the United States leaving the North American Free Trade Agreement (NAFTA):
Mexico is overtaking Canada as the No. 2 exporter of goods to the U.S. this year, in a sign of how economic ties have deepened between the two countries even as the relationship is being questioned by President-elect Donald Trump.
Shipments from Mexico totaled $245 billion in the first 10 months of the year, according to Commerce Department figures released Tuesday, ahead of Canada’s $230 billion. If the trend continues, it would be the first time ever the U.S. bought more imports from its neighbor to the south. The two countries ended 2015 tied in exports to the U.S.
Consider the following unexpected scenario: as long as Trump does not do something radical like leave NAFTA (which, unfortunately, appears under the executive's privilege), Mexico may actually be helped by Trump. Unexpected consequences arise all the time. If so, Michael Bloomberg's
advice is sound: don't pay attention to Trump's sound and fury but rather his administration's policies:
Ignore Donald Trump’s words and focus on his deeds, Michael Bloomberg has told Mexico, advising the country to use the president-elect’s antitrade rhetoric as a wake-up call to sharpen its economy’s competitiveness.
“My advice for Mexico is to use this as an opportunity to look inward and see what you can improve to make this country more competitive,” the former New York mayor, whom Mr Trump last week asked for advice on a potential cabinet nominee, told the FT during a visit to Mexico. On a call last week the two laughed about barbs they traded during the election campaign.
The world economy is a weird place. Obviously, things are not what quite what they seem on the surface.
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