As disputes over the proposed border wall and lopsided trade between the U.S. and Mexico continued this week, an examination of the actual facts of the US-Mexico trade situation is timely.
In President Trump’s apparently preferred way to communicate with the U.S. public, Trump tweeted that the 1994 agreement known as NAFTA was a “one-side deal from the beginning.” Trump noted that Mexico ran a trade deficit with the U.S. from 1991 to 1994 (the year NAFTA went into effect), but moved to a surplus the next year (1995) - and has remained there ever since, growing annually.
Mexico has become a major producer of automobiles, electronics and appliances, in addition to oil exports. For 2016, the estimated trade deficit has ballooned to nearly $60 billion - about 12% of the overall U.S. annual trade gap. U.S. companies have invested heavily in Mexico, employing more than 1.29 million Mexicans.
The graphic on the next page, from Marketwatch.com, shows that the U.S. runs a trade deficit in 12 of the 16 trade categories monitored by the U.S. Census Bureau.