Rise of Mexico: Outpacing China as Top Exporter of US-Bound Manufacturing

Mexico led manufacturing exports to the United States in the first quarter of 2023, with shipments of $101.168 billion dollars, according to data from the Department of Commerce.

The main products exported by Mexico to the United States are computers, cars, and auto parts, delivery trucks, while the largest shipments from China include telephones, computers, toys, and auto parts.

The top exports of Mexico are Cars ($41.5B), Motor vehicles; parts and accessories ($30.7B), Computers ($30.3B), Delivery Trucks ($27.1B), and Crude Petroleum ($20.3B), exporting mostly to United States ($361B), Canada ($17.4B), China ($9.82B), Chinese Taipei ($8.05B), and Germany ($7.63B).

From the perspective of the Cook & Bynum Funds Trust, Russia's invasion of Ukraine and growing tensions between China and the United States highlight the vulnerability of manufacturing assets in hostile countries. In addition, turbulence in the global shipping market has created a preference for proximity to end markets.

At the same time, the Mexico-U.S.-Canada Agreement (T-MEC) favors Mexican manufacturing when the end market is the U.S. or Canada over other low-wage nations, and Mexican wages are currently lower than those of China.

These factors, among others, reinforce Mexico's position as a preferred manufacturing hub to sell into the world's largest economy and consumer market.

Mexico's export industry is highly diversified, with products ranging from automobiles and auto parts to electronic goods, machinery, and agricultural products.

One of the key factors that has contributed to the success of Mexico's export industry is the country's strategic geographic location. Located at the crossroads of North and South America, Mexico has easy access to both the US and Latin American markets. 

Using a shelter company like Co-Production International (CPI), can offer numerous benefits to foreign companies looking to establish a presence in Mexico. A shelter company provides a range of support services to help foreign companies navigate the complex legal and regulatory landscape in Mexico, from obtaining permits and licenses to complying with labor and environmental regulations. This can save companies time and money, allowing them to focus on their core business activities.