Tesla, suppliers to invest $15b in EV factory as Mexico replaces China as top US trade partner
Better late than never: India responds to Belt and Road with Mideast-India railway-corridorALBAWABA – A Mexican official announced that Tesla and its suppliers will invest billions in the underway electric vehicles (EV) factory as Mexico replaces China as top US trade partner, according to United States (US) census data, reported Tuesday.
A state governor in Mexico said the investments would reach $15 billion over the next two years in the factory, which is triple the amount previously announced by Mexican officials, Reuters reported.
Meanwhile, US-Mexican trade has been rising in 2023, first reported by the Federal Reserve Bank of Dallas, back in July, and the Business Insider back in August.
On top of surging exports, Mexico boasts the world’s strongest currency this year and one of the best-performing stock markets, Bloomberg reported.
More so, foreign direct investment is already up more than 40 percent in 2023, even before Tesla Inc. starts building the $5 billion factory.
In July, according to Bloomberg, China’s share of the US trade pie slipped to 14.6 percent while Mexico’s rose to 15 percent, US Census Bureau data confirmed.
As of the end of the first third of the year, total US-Mexican trade totalled $263 billion during the first four months of this year, according to the Federal Reserve Bank of Dallas.
Sino-American ties deteriorate as Mexico replaces China as top US trade partner
Mexico's emergence followed fractious U.S. relations with China, which had moved past Canada to claim the top trading spot in 2014. The dynamic changed in 2018 when the U.S. imposed tariffs on China’s goods and with subsequent pandemic-era supply-chain disruptions that altered international trade and investment flows worldwide.
Deteriorating US-China ties have led to various challenges that disrupted trade between the two countries, from export bans to restrictions on investment, tariffs and more. All while Mexico had been moving to capitalize on the North American Free Trade Agreement it had with the US.
Mexico, the US and Canada are part of the North American Free Trade Agreement - Shutterstock
Mexico’s gains mirror its rise in manufacturing, with total trade of manufactured goods between Mexico and the US reaching $234.2 billion in the first four months of 2023.
Overall, Mexican imports to the US totalled $157 billion and US exports to Mexico reached $107 billion.
Mexico–U.S. trade during the first four months of 2023 represented 15.4 percent of all the goods exported and imported by the US, the Dallas federal bank branch report confirmed. Meanwhile, China’s slipped to 12.0 percent for the first third of the year.
