What are the main factors that contributed to Mexico becoming the top source of imports into the US?

  In 2023, Mexico surpassed China to become the top source of imports into the United States. This was the first
time in 20 years that the US imported more goods and services from Mexico than China.

The Question: What are the main factors that contributed to Mexico becoming the top source of imports into
the US?

In answering this question, you should consider not only why Mexico’s exports to the US have increased, but also
why China’s exports to the US have decreased. Your analysis must include the following three sections:

1. Industries: What types of goods are involved? Are there specific industries in Mexico that are exporting
more to the US, and/or specific industries in China that are exporting less to the US? How does trade
theory (e.g., comparative advantage, Heckscher-Ohlin, etc) help us understand which industries are trading
more/less with the US?

2. FDI & Monetary Relations: Did foreign direct investment (FDI) or monetary relations play a role in
this shift? For example, did investment spur more trade, and/or did exchange rates make China’s goods
less competitive?

3. Policies & Politics: Were there specific policies, such as tariffs or other trade barriers, that contributed
to this shift? Did specific groups lobby the US government for protectionism? Did countries coordinate
their trade policies through treaties or other international institutions?   

 The following sources will get you started:

• https://apnews.com/article/china-goods-imports-trade-mexico-tariffs-trump-eaee6cec8bb3cad
c1103ba60f986b76e

• https://www.cfr.org/in-brief/why-us-imports-mexico-surpassed-those-china
• https://www.axios.com/2023/07/12/us-top-trading-partner-mexico-china

• https://www.businessinsider.com/mexico-overtook-china-us-top-trade-partner-supply-chain-e
conomy-2023-8

• https://www.dallasfed.org/research/economics/2023/0711

For some basic background on Mexico’s and China’s respective economies and trade relations, consult the following
sources:

• China
– https://www.cia.gov/the-world-factbook/countries/china/#economy
– https://www.trade.gov/knowledge-product/exporting-china-market-overview

• Mexico
– https://www.cia.gov/the-world-factbook/countries/mexico/#economy
– https://www.trade.gov/knowledge-product/exporting-mexico-market-overview   

Additional guidelines:

• This is not an argumentative essay. Rather, this is a descriptive analysis that objectively explains why US
imports have shifted from China to Mexico. Your thesis should succinctly summarize the conclusions of
your analysis, but it does not need to make a strong claim. 
• Avoid speculation. Your analysis should be rooted in expert evaluations, reports from government agencies,
statements of public officials, etc. Consult additional sources as needed to support your analysis. Be sure
to employ reputable sources. Blogs, substacks, social media, partisan thinktanks, Wikipedia, cable news,
random websites, and YouTube clips are not acceptable. Policy journals with an international focus—Foreign
Affairs, Foreign Policy, or The Washington Quarterly—are excellent resources. Examples of acceptable
newspaper sources include The Washington Post, The Wall Street Journal, New York Times, Financial
Times, Los Angeles Times, etc., as well as major newspapers in China or Mexico. Examples of acceptable
newsmagazines include The Economist, Bloomberg, The Atlantic, Mother Jones, Forbes, etc. Consult with
your TA if you have concerns about a particular source. Your paper must incorporate at least two highquality sources beyond the course readings and those listed above. Use of inappropriate or low-quality sources
will lower your grade.

• Employ the concepts and terminology discussed in the lectures and course readings. This includes, for
example, comparative/absolute advantage, factor endowments, Heckscher-Ohlin trade theory, protectionism
(tariffs and NTBs), Stolper-Samuelson vs. Ricardo-Viner, and so on. Use these concepts to develop your
analysis.

• All sources must be thoroughly documented, including assigned course readings. Any reference to a source
must be properly cited. See this link for guidance: https://ossja.ucdavis.edu/avoiding-plagiarism-m
astering-art-scholarship. Be sure to include a separate list of references. (The list of references is
not included in the word count.) Any use of AI-generated content is considered academic misconduct and
warrants referral to Judicial Affairs. All submissions will be filtered through TurnItIn’s plagiarism and AI
detector.  

Incorporate 3–4 additional sources beyond the links listed above.