Will Mexico Remain the US’ Main Trade Partner?By Sofía Hanna | Tue, 02/23/2021 - 17:23
Recently, the US Department of Commerce released information stating that China met 63 percent of its commercial commitments with the US for Phase One of the merchandise trade agreement with the United States during 2020. The total trade expected between the US and China was US$142,900 million but in the end, it came to a total of US$89,600 million, according to El Economista. There can be many reasons as to why the goal was not reached, among them the trade war and the pandemic, but with Biden’s initiatives and ideas around the relationship between both countries, a new future could be on the horizon.
“Here is my message to those beyond our borders. America has been tested and we have come out stronger for it. We will repair our alliances and engage with the world once again ... We will lead, not merely by the example of our power but by the power of our example. We will be a strong and trusted partner for peace, progress and security,” Biden said during his inauguration speech, as previously mentioned by MBN.
It has been no mystery that one of Biden’s plans is to rebuild relationships with other countries, among them China, to build a more potent force. Trade numbers with China might not have met the expectations in 2020 but this might not be the case in 2021, if Biden’s plans move along.
Where does Mexico fit in all of this? As reported by MBN, the Mexican economy is deeply dependent on the US and the commercial relationship between both countries. Mexico has also benefited from the trade war that was going on during Trump’s presidency with the Chinese government. Now, “there could be a change of strategy, which would impact the current trade dynamic with Mexico,” said Gustavo Flores-Macías, Professor at the University of Cornell, to BBC News.
Mexico is also still battling with the devastation brought by COVID-19, which further stresses the country’s economic position and its chances for a speedier recovery. According to El Heraldo, 80 percent of Mexican companies are deciding against taking on further debt amid lingering lockdowns and uncertainty of when the business will fully adapt to the new normal. López Obrador’s administration has also claimed to be against further indebtment. However, if the Mexican government does not use debt to reorient expenditures toward profitable projects or to give development banking a more active role, this could hinder the country’s chances for recovery, as mentioned in an MBN article.