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US Trade With Mexico Starts to Slow Down
US trade with Latin America overall grew 5.4% in first half.
BY JOACHIM BAMRUD
Mexico saw a slight slowdown in trade with the United States in the first half, while the rest of Latin America increased its trade, according to a Latinvex analysis of data from the US Census Bureau.
Mexico was the only country in Latin America that suffered from country-specific US tariffs during the first half. All other countries saw the new tariff rates come into effect on August 7.
Mexico has had to deal with a 25% tariff on autos and auto parts since April 3 and since March 4, a 25% tariff on Mexico for commodities not covered by the United States-Mexico-Canada Agreement and a 10% tariff on non-USMCA energy products and non-USMCA potash.
Mexico – along with some other Latin American countries – also has suffered the effects of the 25% tariff rate imposed on March 12 for all US imports of steel and aluminum.
Donald Trump in July announced that he would raise the tariffs on Mexico to 30% but subsequently said he would pause that for 90 days to give Mexico time to negotiate a deal with the US.
US TRADE DATA
US trade with Mexico grew 4.2% in the January-June period, reaching a total of $432.6 billion. Exports to Mexico inched up 1.1% to $168.2 billion, while imports from Mexico grew 6.3% to $264.4 billion.
Meanwhile, US trade with South and Central America grew nearly twice as much – 8.2%, reaching $191.1 billion. US exports increased 6.6% to $106.2 billion, while imports expanded by 10% to $84.8 billion.
US trade with Brazil and Chile, its second- and third-largest trade partners in Latin America, grew by double digits. US trade with Brazil increased 11.1% to $48.6 billion, while trade with Chile increased 21% to $20.3 billion.
US exports to Brazil reached $26.6 billion, an increase of 14%, while imports from the South American country expanded by 7.8% to $22 billion.
However, US imports from Chile stood out in the first half, seeing a 35% jump to $10.6 billion. US exports to Chile grew 8.8% to $9.7 billion.
US trade with Colombia grew by 7% to $18.8 billion, with US exports to the country growing 11.27% to $9.6 billion, while imports increased 2.9% to $9.1 billion.
All in all, US trade with Latin America grew 5.4% during the first half of the year, reaching a total of $623.6 billion, according to the Latinvex analysis of US Census Bureau data.
TARIFF IMPACT
Trade in the second half will likely be more significantly impacted by the new tariffs imposed last month.
They are a flat 10% for Argentina, Chile, Colombia, Dominican Republic, El Salvador, Guatemala, Honduras, Panama, Paraguay, Peru, Suriname and Uruguay.
Bolivia, Costa Rica, Ecuador, Guyana and Venezuela were slapped with a 15% tariff, while imports from Nicaragua are now facing an 18% tariff.
However, Trump decided to punish imports from Brazil with a whopping 50% in retaliation for the South American country putting on trial its former president (and Trump ally) Jair Bolsonaro for his 2022-2023 coup attempt. (See Trump Hurts Brazil Business Outlook)
Trump has also threatened to impose tariffs on copper (which would hit Chile, Mexico and Peru) and pharmaceuticals (which would hurt Mexico).
© Copyright Latinvex
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