Originally published at: Borderlands Mexico: Renegotiating USMCA may boost North American trade - FreightWaves
This week in Borderlands Mexico: Renegotiating USMCA may boost North American trade; Automotive supplier opens manufacturing facility in Guanajuato; Humanscale expands manufacturing operations in Nogales; and New import cold storage facility slated for Texas border city.
Do I see this as a positive thing, i.e., the current trade with Mexico and Canada? Consider this: While the U.S. has the highest GDP in the world ($30.57 trillion to China’s $19.23 trillion), its manufacturing base continues to shrink from its zenith (per the GDP) of 1979 while its current consumption of goods continues to rise. One main domestic agenda of the current U.S. Administration is to greatly expand U.S. manufacturing and reduce consumer dependency on foreign durable and nondurable goods. This includes cutting back on imports from countries such as China, Venezuela, and Pakistan, and neighbors such as Canada and Mexico, the latter two adding to the U.S trade deficit annually by $65 billion and $172 billion respectively. The trade deficit with China is a massive $295 billion, and with Vietnam the deficit in trade is $124 billion. Will it work? . . . why is a trade deficit of $172 billion with Mexico, and $65 billion with Canada a Good Thing!? How does that make the U.S. stronger? A: It does not.
Q: How does our current trade with Mexico and Canada affect the number of restaurants offering tacos and burritos and the number grocery stores selling maple syrup?