Press. voanews.com
Despite what he
called a friendly discussion with Mexico's president Friday, President Donald
Trump doubled down on his attacks against the imbalance in U.S.-Mexico trade.
In a tweet
Friday before his hourlong telephone conversation with Mexico's President
Enrique Pena Nieto, Trump said: “Mexico has taken advantage of the U.S. for
long enough. Massive trade deficits & little help on the very weak border,
must change, NOW!”
But it
turns out trade with Mexico may not be as lopsided as Trump would have
Americans believe. Bilateral trade in goods and services between the two
countries was indeed massive, estimated at $583 billion in 2015. Of that, the
office of the United States Trade Representative (USTR) reports total U.S.
exports to Mexico amounted to $267 billion, while Mexican imports to the United
States were $316 billion — leaving the U.S. with a $49.2 billion trade deficit.
Numbers
can be tricky
On closer
examination, that's not the entire story. In the category of professional
services, the U.S. may actually have the upper hand. Total trade in services
between the two countries was $52.4 billion in 2015, with the U.S. exporting
$30.8 billion in services and taking in $21.6 billion from Mexico. That means
the U.S. actually enjoyed a service trade surplus of $9.2 billion. The top
service categories include travel, transportation and computer software.
Mexico is
the third-largest supplier of goods bound for the U.S., but it's also the
United States' second largest export market, supporting an estimated 1.1
million jobs in the U.S. Since signing NAFTA (the North Ametrican Free Trade
Agreement) in 1994, U.S. exports to Mexico have risen 468 percent, accounting
for nearly 16 percent of overall U.S. exports.
Economists
say trade between the two countries also is complicated. One example — car
parts: Over a five-year period, the United States imported about $340 billion
worth of auto parts from Mexico. Of that, $136 billion worth of parts were
exported back to Mexico, where they were used to manufacture cars that are then
sold back to the United States.
That's
one of the reasons why some trade analysts say it makes no sense to punish one
of America's closest trading partners. William Galston at the Brookings
Institution in Washington says Trump needs to be careful not to hurt American
businesses when renegotiating established trade deals.
“Since
NAFTA, U.S. automobile producers have created a continental supply chain, with
Canada and Mexico providing parts and some assembly. That's an important part
of the competitiveness of the U.S. auto industry. So if that relationship were
to be disrupted, it could have serious consequences.” Galston adds that disrupting that “conveyor
belt” of trade is unlikely to bring back American jobs.
Mexican
goods bound for the U.S. include agricultural products, such as vegetables,
fruit and beer. Creating a border adjustment tax for Mexican goods, as Trump
has proposed, could hurt Mexican producers, but it would also have a direct
effect on American consumers, by raising prices of the Mexican products they
buy.
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