Mexico's Trade Deficit Hits US$133 Million Despite Exports

Mexico's trade balance recorded a deficit of US$133 million (MX$2.6 billion) in November 2024, reversing the surplus observed in previous months. Despite a general increase in exports, largely driven by the depreciation of the peso and strong US economic performance, imports surged, especially in intermediate and capital goods, outpacing export growth.

Exports grew by 3.7% year over year in November, reports INEGI, with non-petroleum exports increasing by 4.0%, while petroleum exports declined by 2.7%. This growth was insufficient to offset the 5.1% increase in imports, driven by a 6.7% rise in non-petroleum goods, while petroleum imports fell by 15.8%.

The increase in exports was largely due to the peso’s depreciation and positive trends in the US economy, says Gabriela Siller, Director of Economic and Financial Analysis, Banco BASE. She adds that the depreciation of the Mexican currency had led to a reduction in imports of consumer goods in recent months.

The accumulated trade deficit for the first 11 months of 2024 reached US$10.78 billion, a 10.73% increase compared to the same period in 2023. For November, total imports amounted to US$52.16 billion, a 5.1% increase compared to November 2023. Meanwhile, exports were valued at US$52.03 billion, rising by 3.7% year-over-year.

This marks a reversal from October’s surplus of US$370.8 million, which ended a seven-month streak of trade deficits. In the same period, exports grew by 11.2%, bolstered by the US demand for Mexican non-petroleum goods, which represent 95% of total exports. Specifically, exports from the manufacturing sector grew by 3.4%, with non-automotive exports rising by 5.2%, while automotive exports showed a marginal 0.2% increase.

The United States remains Mexico's largest trading partner, accounting for 84% of non-petroleum exports. Since December 2023, Mexico has surpassed China as the primary US trading partner.

Experts are concerned about the future of Mexico’s export activities, especially amid growing uncertainty surrounding potential trade tensions with the United States. US President-elect Donald Trump has threatened to impose tariffs of up to 25% on Mexican imports, leading analysts to warn of potential risks for Mexico’s manufacturing sector, particularly the automotive industry. This could negatively affect the nearly 84% of Mexican exports that are destined for the United States.

In addition, fluctuations in oil prices and geopolitical tensions may further impact the country's export figures, particularly in petroleum sales. Currency volatility, particularly the depreciation of the peso, could have an asymmetric impact, making exports cheaper for the United States while increasing the cost of imports to Mexico.

For the year-to-date, Mexico’s trade deficit stood at US$10.78 billion as of November, compared to US$9.73 billion in the same period last year.