Nearly 5 million US jobs depend on trade with Mexico, and political rhetoric jeopardizing these jobs should be more governed by the facts. Mexico creates US jobs, but those jobs depend on upon a system of cooperation that could disappear if politicians are not careful to better appreciate the unique relationship between the two countries.
The Political Appraisal
Especially in the presidential race in the US, political appraisals of the US-Mexico relationship have been couched in negative terms. Some seem to fear that trade with Mexico is diminishing the economic strength of the US and taking US jobs away. There have been calls for imposing 35% tariffs on Mexico, blocking remittances to Mexico from workers in the US and abrogating NAFTA. But this political appraisal could not be further from reality.
The Reality of US-Mexico Trade
The reality is that Mexico creates US jobs. In fact, according to a project by the Woodrow Wilson Center’s Mexico Institute, approximately 4.9 million US jobs depend on trade with Mexico. In 13 US states, at least 100,000 net manufacturing and service jobs come from trade with Mexico. For some states, that number is over 300,000. About 40% of the value in manufactured goods sold to the US from Mexico comes from US laborers working hard to provide our southern neighbor with the inputs needed to produce those goods. Compare that number with 4% of the value of goods from China and 2% for goods from the European Union.
These numbers reflect an immense amount of trade between the two North American countries and underscore the importance of continued trade for the sake of literally millions of US jobs. More than $1 million USD in trade crosses our border every minute. Last year, two-way trade with Mexico has risen to $584 million USD annually, an increase of 35% from 2010 and much higher than the rate of US trade with the rest of the world. Approximately 57,000 US companies – and the workers they employ – participate in, and rely on, that trade with Mexico.
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A Call for Fact-Based Policy
In spite of these overwhelming numbers showing how Mexico creates US jobs, there is the threat that remarks and intentions expressed in recent, national politics in the US could spark a trade war with Mexico and China. According to a study recently released by the Peterson Institute of International Economics, such a trade war could cost the US up to 4.8 million jobs here at home. Mexico is a crucial partner with the US and is fundamental to our competitiveness and prosperity long term. Policy proposals should consider this partnership and the millions of US jobs dependent on our southern neighbor. A good understanding of the facts will help policymakers identify the real challenges to job growth in the US and protect those jobs we already have.
The Tecma Group of Companies is focused on helping companies in both the US and Mexico understand the facts. Manufacturing in Mexico is an example of how two nation’s can help each other through agreements such as NAFTA. Few understand the facts. Many hear the rhetoric. Feel free to browse our blog here at https://www.tecma.com to study the articles that have been developed for the benefit of those interested in learning the truth.