If a trade war looms between the US and Mexico, it would play out at the car lot, the electronics store, and the supermarket.
Rising tensions — spurred by President Donald Trump’s planned border wall and his suggestion to tax Mexican imports to pay for it — have put a spotlight on trade between the two countries.
It turns out the neighbors depend on each other for a lot of stuff.
Since 1993, before the North American Free Trade Agreement was signed, America’s exports to Mexico have grown by 468 percent, and Mexico’s exports to the US have grown by 638 percent, according to the US Trade Representative.
That leaves the US at a deficit, for better or worse. Mexico in 2015 sold $295 billion into the US, compared to $236 billion going the other way. But the two economies are deeply interwoven. American auto parts are used to build Mexican cars, and vise versa. The countries swap raw materials and industrial equipment. At the dinner table, Mexico brings the guacamole while the US brings the corn.
All told, the US is Mexico’s largest trading partner, and Mexico is the US’s third largest, behind China and Canada. Here are a few ways it works out.
Food: US supermarket shares dipped Friday on the fear that a trade dispute might mean more expensive avocados, beer, and tequila for American consumers, as Mexico is the second largest provider of agricultural products to the US. But Mexico buys a lot to eat from the US, too: billions of dollars of American corn, soybeans, dairy, and beef were sold into Mexico in 2015.
Cars: Trump has taken very public aim at auto companies who sell Mexican-made cars in the US, and the practice is common. The US bought about $23 billion of Mexican-made passenger vehicles in 2015, compared to $3 billion in US passenger vehicle sales in Mexico, according to the US Census Bureau. The two sides build vehicles with parts sourced from each another: the US sells about $30 billion worth of engines, bodies, tires, and other parts to Mexico, compared to about $53 billion sent north from Mexico.
Consumer goods: Mexico is a big provider of computers ($15 billion in 2015), televisions ($12.5 billion), and home appliances ($7 billion) to the US. The US has its own business providing Mexico with electronics—$15.4 billion in computer accessories, and $7.3 billion worth of semiconductors.
Raw materials: The US has been sourcing much less crude oil from Mexico in recent years, but still bought nearly $12.5 billion worth of it in 2015. Meanwhile, as natural gas has become increasingly available in the US, Mexico has stepped up to become big buyers, with purchases soaring to more than $2 billion a year. The natural gas boom has also allowed the US to increase sales of chemicals to Mexico; chemicals are easier to process when natural gas is cheap.
Adam Vaccaro can be reached at adam.vaccaro@globe.com. Follow him on Twitter at @adamtvaccaro.