Mexico-China Trade: 53 Years of Exponential Growth

While formally rooted in decades of diplomacy, the relationship between Mexico and China has frequently been tested by underlying trade and political tensions that continue to shape their interactions today. Now in their 53rd year of relations, the dialogue between the two countries is shaped by the challenging issues of tariffs, nearshoring, and the terms of future collaboration.

The trade relationship between Mexico and China dates back to the 16th century, during Mexico's colonial era, with the establishment of the Manila Galleon route, also known as the Nao de China. This historic trade link connected Asia with the Americas via the port of Acapulco, facilitating a rich exchange that brought Asian silk and porcelain to New Spain while exporting Mexican silver to China.

The modern diplomatic relationship between the two countries was established following a shift in Mexico's foreign policy. On Oct. 25, 1971, Mexico voted in favor of UN General Assembly Resolution 2758, which recognized the People's Republic of China as the sole representative of China to the UN and removed the representatives of Taiwan. According to historical accounts, the government of President Luis Echeverría made this decision despite pressure from the United States to abstain. This vote preceded the formal establishment of diplomatic relations between Mexico and the People's Republic of China on Feb. 14, 1972.

Heavily Trade-Oriented Relations 

Since the beginning of their interactions, Mexico and China have had a trade-driven relationship. According to former Chinese Ambassador to Mexico Zhu Qingqiao, over the past five decades of relations, bilateral trade has grown by 4,700 times, with over 70% of Chinese imports to Mexico being intermediate products for the manufacturing of other goods. 

Today, China is Mexico’s third trade partner, accounting for over 1.6% of the country’s exports, just behind Canada with 3%, and the United States with over 79.6% of them. In 2024, trade between Mexico and China was valued at US$139.73 billion, with Mexican exports to China totalling US$9.93 billion and imports US$129.8 billion, resulting in a trade deficit of US$119.85 billion in favor of China, which experts consider is extremely asymmetric. 

"From 2001, the year China successfully concluded its accession to the World Trade Organization (WTO), and up until 2022, Mexico's trade deficit with China has grown impressively. Broadly speaking, during that period, the deficit grew at a rate of nearly 20%," noted María Hernández, Professor, Jenkins Graduate School, and José Enciso, Director of Business Intelligence, Keno Consulting.

According to the Ministry of Economy (SE), Mexico's main exports to China in 2024 were copper ores and their concentrates, valued at US$2.32 billion. The primary states of origin for these sales were Sonora, Puebla, and Mexico City. Conversely, Mexico's main imports from China were telephones and wireless network devices, with purchases totaling US$9.44 billion. The top destinations for these goods were Mexico City, Chihuahua, and Baja California. In the same period, FDI from China into Mexico totaled US$710 million. The primary recipient states for this investment were Mexico City with US$541 million, Campeche with US$63.3 million, and Coahuila with US$55.9 million.

According to PRODENSA, the Mexico-China trade relationship is shaped by a dual dynamic of competition and complementarity in three key industries. In the automotive sector, Mexico has established itself as a major manufacturing hub for traditional vehicles, while China leads in the production of electric vehicles (EVs) and batteries. The electronics industry showcases complementarity, with China supplying components and subassemblies for final assembly in Mexico for the North American market. A third area with significant promise is renewable energy, where China's leadership in solar panel and wind turbine manufacturing aligns with Mexico's ideal geographic conditions and market access.

PRODENSA says that for Chinese companies, Mexico serves as a strategic gateway to the North American market, allowing them to leverage USMCA to potentially overcome trade barriers like tariffs. This dynamic is intensified by both direct trade competition between Mexico and China in key sectors like steel and by recent US tariff policies under the Trump administration targeting Chinese goods. However, this nearshoring opportunity presents significant challenges. Companies must navigate complex tax regulations and comply with strict USMCA standards, such as the rules of origin for key sectors like automotive and steel, which often require them to integrate local suppliers or invest directly in Mexican production infrastructure.

A Fast-Paced Growing Economy 

Since China began to open up and reform its economy in 1978, GDP growth has averaged over 9% a year, and almost 800 million people have lifted themselves out of poverty, reports the World Bank. China’s population totaled 1.41 billion in 2024, a 0.1% contraction. The same year, GDP grew by 5% at a nominal rate of U$1.41 trillion, making it the second-largest economy, just behind the United States. 

The country is expected to slightly slow down its growth rate to 4.7% in 2025 and weaken further to 4.3% in 2026, according to the OECD. “Exports will be curbed by the newly imposed tariffs on trade with the United States, while imports will fall due to continued localization of production,” reads OECD’s forecast. 

Trade with the United States represents a primary challenge for China, a situation that began during President Donald Trump's first term. The relationship has been characterized by tense negotiations since the Trump administration initiated a trade war, imposing significant tariffs on Chinese goods and escalating economic friction between the two countries. At the time of writing, both countries are in talks to extend a 90-day “tariff truce,” set to expire on Aug. 12, 2025. The current tariffs between both countries are set at 10% for US goods entering China and 30% for Chinese goods entering the United States, in addition to existing tariffs.