Mexico Surplus Hits 17-Year Low as US Imports Jump 13%

Mexico's trade surplus with the United States narrowed 20.5% year-over-year in January 2026 to US$10.93 billion, the steepest decline since August 2009, as imports from the United States surged 13.1%, a shift analysts link to manufacturers in Mexico increasing procurement of US-origin inputs to comply with tightening USMCA rules of origin. Despite the contraction, Mexico retained its position as the top US trading partner, recording $74.1 billion in bilateral transactions as total US trade volume fell 5.8%, while a record full-year 2025 surplus of US$196.9 billion has placed the bilateral trade imbalance at the center of the upcoming USMCA review. Exporters, manufacturers operating under IMMEX, and companies with Asian-origin supply chains face the most immediate exposure as Washington signals intent to address the deficit and Mexico enforces tariffs of 5%–50% on US$52 billion in imports from non-trade-agreement countries.

Mexico's trade surplus with the United States narrowed 20.5% year-over-year in January 2026 to US$10.93 billion, the steepest decline since August 2009, excluding the atypical months of 2020 due to COVID-19. The contraction reflected diverging trade flows: Mexican exports to the United States grew 2% to US$42.52 billion, while imports from the United States surged 13.1% to US$31.59 billion. Despite slower export growth, Mexican exports to the United States set a record for the month of January, and imports posted double-digit growth for the second consecutive month.

The January surplus decline was the second consecutive monthly drop, a pattern that has been rare since the USMCA took effect in July 2020. In the 61 months from 2021 through January 2026, Mexico's surplus posted year-over-year declines only seven times, and never in back-to-back months until the most recent two-month period.

Even so, Mexico reinforced its position as the United States' top trading partner in January 2026, recording US$74.1 billion in bilateral transactions, up 6.5% from January 2025, as total US trade volume contracted 5.8% to US$470.4 billion, meaning Mexico expanded its market share. Canada also saw bilateral transactions fall 19.5% to $US52.8 billion, reflecting a 10.3% drop in US exports to Canada and a 26.1% collapse in Canadian exports to the United States.

For full-year 2025, Mexico accumulated a record trade surplus with the United States of US$196.9 billion, 211% higher than the level recorded in 2016, when Donald Trump made renegotiating the North American Free Trade Agreement a central campaign issue, citing the US trade deficit with its treaty partners.

That surplus has drawn renewed attention in Washington. In its 2026 Trade Policy Agenda, the Office of the US Trade Representative listed the bilateral trade deficit as a concern to be addressed in the upcoming USMCA review. "The United States not only continues to have large deficits with Mexico and Canada, but those deficits have also increased since the USMCA entered into force," the USTR said. The document did not outline specific measures to reduce the deficit.

In July 2025, Claudia Sheinbaum said the country was developing proposals to address the imbalance without harming the Mexican economy. "The trade deficit can be reduced through different mechanisms that do not affect Mexico's economy, so we have been developing a series of proposals," she said.

The Tariff Differential Driving Supply-Chain Repositioning

The import surge coincides with a broader reorganization of supply chains through Mexico. As the tariff differential between Mexican and Chinese goods widens, more manufacturers are routing production through Mexico and, analysts say, increasing procurement of US-origin inputs to meet USMCA rules of origin requirements, a shift that is beginning to show up in the bilateral trade data.

The United States applies an effective tariff rate of 4.18% on Mexican goods, compared with 30.93% on Chinese imports, 13.89% on Japanese goods, 12.72% on Vietnamese products, and 9.79% on German shipments, against a global average of 9.81%. 

The cost gap between Mexican and Chinese exports has nearly doubled over the past year: at the start of January 2025, Mexican products entering the United States carried tariffs below 1%, while Chinese goods faced a rate of 12.3%. That differential is a primary driver behind the increase in manufacturing activity being routed through Mexico, and, consequently, behind the rising volume of US inputs being purchased by Mexican producers.

However, US consulting firm Foley & Lardner LLP cautioned that Mexico's structural advantages carry conditions that companies are only beginning to fully understand. In a report, Alejandro Gómez-Strozzi, International Trade and Transactions Partner, and John Turlais, Counsel, warned that companies assuming maquiladora status automatically guarantees duty-free US market access would likely be disappointed. Firms that prioritize compliance, origin planning, and tariff modeling, they said, will find Mexico remains the most viable manufacturing platform in a high-tariff environment.

The firm identified what it called the "maquiladora fallacy," the widespread belief that companies operating under the IMMEX program are exempt from customs duties. While IMMEX provides temporary relief on imported inputs, that benefit is constrained by the USMCA's "Lesser of Two" rule, under which tariffs on non-USMCA materials cannot exceed the lower of the duty payable in Mexico or the duty that would apply when the finished product enters the United States or Canada. As more companies route production through Mexico to access the US market, compliance with that rule is becoming a material cost factor.

Mexico's own import tariff policy is compounding the complexity. Since Jan. 1, Mexico has applied tariffs of between 5% and 50% on 1,463 products from countries without trade agreements, including China, South Korea, India, Malaysia, and Thailand, measures affecting imports valued at approximately US$52 billion, equivalent to 8.6% of Mexico's total foreign purchases. For manufacturers operating in Mexico that rely on Asian-origin inputs, those tariffs are raising production costs and reinforcing the shift toward United States and USMCA-compliant sourcing, a dynamic that is visible in January's import figures and is likely to persist as the USMCA review approaches.