The political and trade war between the United States and China has gained relevance on the international scene for decades. Conflicts continue to be talked about from the beginning of the Barack Obama administration to later evolve into a full-scale conflict in the Donald Trump administration, but why did this confrontation start? And how does it benefit Mexico? Let’s break down each point in detail below.
This war, which in itself has had various impacts globally, originated with numerous accusations between the two governments related to national security, such as espionage and theft of sensitive information through software or hardware, as well as anticompetitive practices such as copying of commercial secrets and other strategies created by North American companies for their subsequent replication in Chinese territory.
Criticism between these two powers has been increasing in the current government of Joe Biden, who has accused China of artificially raising the price of its exports, thus creating an environment of concern for the rest of the countries that equally depend on the logistics services of the Asian giant, not to mention the rigorous requirements that foreign investors must submit to when wanting to invest in that territory. With this certain degree of enmity regarding the field of exports, the United States has seen in Mexico an essential ally when it comes to maintaining a healthy economy thanks to a recurring commercial relationship based on exports to the neighboring country and vice versa.
Mexico: The great beneficiary of the trade war between China and the US
Although the trade war between China and the United States continues in force with great roughness, countries like Mexico have been able to see a golden opportunity within a complicated context, benefiting from its proximity and the low costs in terms of the transportation of merchandise because it does not require air or maritime for the movement of merchandise. This has resulted in a significant source of income for the Latin American country, which has come to replace the demand of China in this type of logistics operations.
In fact, it is important to note that in 2019 alone, trade between the United States and Mexico exceeded 9.95% compared to that previously registered with China. Mexico, in turn, has also been highly benefited by this trade war carrying out numerous exports to the Asian country and although the latter adds more economic income, even generating new direct and indirect jobs, Mexico must face challenges after the high demand for merchandise sent to China and vice versa, also adding the trade deficit with which the Latin American country is still struggling today, which represents a challenge of significant dimensions when it comes to meeting the demand both when receiving products from both countries and also when sending them.
Important companies that have promoted the manufacturing sector in Mexico
As regards the trade war between the United States and China, it is necessary to comment on other of the benefits that Mexico has received after the “explosion” of this crisis, and that is that many large companies such as Samsung, Walmart, Amazon and even Dell, have transferred some of their supply chains to the Mexican territory in order to reduce production costs and at the same time cover the growing demand in both countries, either in terms of the consumption of basic necessity products or those related to technology as such.
These movements also pursue the goal of meeting the demand that until recently only China could satisfy before this trade war, especially when it comes to technological devices such as desktop computers, laptops or smartphones, although there is still a long way to go, since the Asian country still represents just over 18% of imports to the United States, something that can only be changed by a greater investment in the construction of assembly centers, distribution and the much-needed labor both robotic and human.