ALBUQUERQUE, N.M. — New Mexico exports to Mexico are headed for another record high this year, growing 11% from January-June, compared with the first half of 2019.
In contrast, trade with Asian and European countries is down substantially, likely hindered by logistical disruptions and economic fallout from the global pandemic, plus President Donald Trump’s ongoing trade war with China.
Exports to Mexico have grown dramatically over the past decade, especially last year, when sales south of the border leapt to an all-time record of $2.39 billion, up 58% from the $1.51 billion in state exports logged in 2018, according to trade data from the U.S. Commerce Department.
Those trends continued during the first half of 2020. Exports to Mexico grew by another $109 million, from $977 million in January-June 2019 to $1.09 billion this year.
Telecommuting in the pandemic has apparently boosted trade with Mexico, given the rising demand for computers and related goods, said New Mexico Trade Alliance President Randy Trask.
Sales of computer and electronic components to Mexico-based manufacturers like Foxconn grew 24% in the first half of 2020, from $546 million in January-June of 2019 to $676 million this year. In contrast, sales of fabricated metal products, oil and gas, transportation equipment, paper, and other goods fell during the first six months of 2020.
“There’s been a gigantic surge in demand for computers and related electronics with people forced to work remotely from home,” Trask said. “That’s boosted New Mexico exports, particularly computer components from Santa Teresa to the Foxconn plant across the border.”
Full ratification of the new U.S, Mexico, Canada Agreement – which officially replaced the old North American Free Trade Agreement on July 1 – has also brought a renewed sense of stability among trade partners on both sides of the border, said Jerry Pacheco, executive director of the International Business Accelerator and president of the Border Industrial Association and a regular columnist for Business Outlook.
“We still don’t know what the long-term impact on industries like auto manufacturing will be, but ratification of the new USMCA brought a collective sigh of relief along the border,” Pacheco said. “Now that trade negotiations are over, we can all learn to play under the new rules without uncertainty about the future.”
Exports to Mexico, which accounted for 56% of all state exports worldwide from January-June, helped buffer a decline in global sales of New Mexico products. Worldwide exports fell 5%, from $1.96 billion in the first half of 2019 to $1.95 billion this year. Exports to Europe declined by 20%, from $170 million to $136 million, and sales to Asian countries fell by 18%, from $691 million to $565 million.
Sales to China are markedly lower, falling 22% from $506 million in January-June 2019 to $393 million this year.
Supply chain disruptions from the pandemic are a factor. But the Trump administration’s ongoing trade war with China is also taking a toll, Pacheco said.
“The China trade war is hurting us,” Pacheco said. “Exports are suffering a lot, with agricultural and industrial products caught in the crossfire.”