Mexican Exports Fall as Trade Deficit Hit New Record

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With a background as vice provost for international affairs at Harvard University, Dr. Jorge I. Domínguez focused on Latin American politics and economics. Dr. Jorge I. Domínguez was the Antonio Madero Professor for the Study of Mexico and has extensive knowledge of the trade relations between the United States and Mexico.

In seasonally-adjusted terms, Mexico posted its largest trade deficit on record through April 2020. This reflected foreign demand for the products it manufactures falling more sharply than its imports. The $4.29-billion trade deficit registered in April contrasted with a $1.51 billion trade surplus a year earlier. With JP Morgan projecting a 40 percent second-quarter decline from the first quarter, an overall 8.4 percent contraction is predicted for 2020.

A major driver of this export collapse has been a sharp drop in auto production, as car manufacturing plants closed up due to COVID-19 concerns and international demand faltered. With exports at their lowest level since 2010 and imports only $15.8 billion in April, China retook the top spot in terms of US trading partners. One silver lining is the US-Mexico-Canada Agreement, which comes into effect on July 1, 2020 and has the potential to assist trade recovery at a time when the North American economy needs it most.

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Currently in retirement, Jorge Dominguez most recently served as the Antonio Madero Professor for the Study of Mexico at Harvard University for 12 years.

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