Manufacturing Jobs Leave U.S. as Mexico’s Manufacturing Industry Picks Up

Flags of USA and Mexico isolated on white
iStock.com/MikhailMishchenko

U.S. Trade Deficit Widens in July as Mexico Trade Deficit Narrows

While President Donald Trump gets busy looking for ways to fund “The Wall,” Mexico is quietly covering all of its bases. The latest trade data out of Mexico reveals that the United States’ southern neighbor is busy strengthening its manufacturing industry as the U.S. witnesses a slowdown in its own industry and sheds factory jobs.

Mexico’s exports climbed eight percent from July 2016 to July 2017, while U.S. exports only grew 4.2% during the same period. Likewise, Mexico’s imports rose 6.6% in one year, while U.S. imports increased almost five percent year-over-year.

Overall, Mexico saw its exports jumping more than its imports, while the United States saw the increase of its exports lag behind the increase of its imports.

The most significant increase in Mexican exports was in manufactured goods. In particular, exports of vehicles and auto parts recorded a solid 13.2% gain in July. In contrast, the United States registered a decline in the similar category; exports of vehicles dropped by 0.4% in July this year, compared to the same period a year ago.

Advertisement

Likewise, other Mexican factory-made goods saw a year-over-year jump in exports by 4.5%. Meanwhile, the United States saw a 9.2% decline in exports of factory-made industrial supplies in the same period.

The trend should sound the alarm for American manufacturing workers, as more U.S. manufacturing jobs move to Mexico. In fact, America’s biggest automakers—the “Detroit Three”—have been cutting back production in the U.S. while moving their manufacturing to other countries.

The most recent example of U.S. manufacturing jobs moving to Mexico was in June, when Carrier Corporation announced that it was moving a manufacturing plant to Mexico. The same plant had remained a major focus of Trump’s election campaign when he promised to keep Carrier from killing the American jobs. Despite Trump’s repeated reassurances, he failed to deliver on that promise.

It is somewhat ironic that the Trump keeps blaming Mexican illegal immigrants for stealing American jobs, while turning a blind eye to the fact that Mexico, with its cheaper labor and more business-friendly legal environment, is continuing to attract an increasing number of American corporations, thus continually stripping Americans of thousands of jobs.

 

Sources

Mexico Registers $1.52 Billion Trade Deficit in July,” The Wall Street Journal, August 28, 2017.

Monthly Advance Economic Indicators Report, July 2017,” U.S. Census Bureau, August 28, 2017.

Advertisement

Advertisement