|But Where Does The Money Go From There?|
The true size of our trade deficit with Mexico is difficult to get a handle on, some figures show it as over 64 billion dollars in 2016 while a recent article claimed the number was closer to 74 billion. The numbers below are even uglier coming in around 122 billion dollars, similar numbers were reported on several websites, in this case, it is not so much a question of their authenticity or accuracy that is important but what really stands out is where Mexico sends its trade income. The following numbers show that when it comes to trade in 2016 exports of goods and services made up just over 38% of Mexico's GDP but even with a huge trade surplus with the United States, Mexico still ran an overall trade deficit.
|Total Exports (2015)||$380,600,857,434|
|Total Imports (2015)||$395,232,221,167|
|Trade Balance (2015)||-$14,631,363,733|
|Top 10 Export Partners||Export Volume ($)|
|Top 10 Import Partners||Import Volume ($)|
The math from these numbers indicates that in addition to the United States being a huge importer of goods from China, Mexico also ran a trade deficit with them of around 64 billion dollars. Interesting, while the numbers are not nearly as bad Canada adds another 19 to 36 billion dollars to the wealth leaving the North American continent depending on whose numbers you believe. Canada is considered to be a "trading nation" in that its total trade is worth more than two-thirds of its GDP. As expected the United States accounts for the bulk of its exports of 392,260 billion dollars and 359,915 dollars of imports. This means like Mexico, Canada also runs a trade surplus with the United States but because it runs a deficit with its next three largest trading partners, Europe, China, and Mexico as a percentage it all nets out as nearly a wash.
When all is said and done, the fact is America is feeding the "Chinese Japanese Economic Complex" even more than is first apparent I use this terminology which may seem strange to many readers because under the surface the ties between the two countries are much stronger than many people realize. If we add the deficit the United States has with China of 347 to Mexico's 64 billion and Canada's, lets say 25, we come up with a whopping 436 billion. Next comes Japanese trade where the United States negative 69 billion when added to Mexico and Canada shortfalls of around 18 billion that totals another 87 billion. Together the three countries in North America are sending somewhere around 523 billion dollars a year to these two countries, over half a trillion dollars is a staggering amount of money, and much of that cash flow is enabled by the overspending of consumers here in the United States.
|Once Wealth flows To Asia, It Stays There|
This article ties in with two others recently published. One delves into how China has not been fair in trading with America and how a very strong strategic dimension exists for NAFTA and a powerful regional trade bloc to compete in a changing global economy. http://Nafta And Regional Trade Better than Buying From China.html The second explores the relationship between Japan and China and how it has grown stronger over the years. http://Japan's Strong Economic Link To China.html This tight relationship is apparent each time trouble surfaces in China the yen jumps in value as wealth in a stealth move flees China often through business back-channels. This should not be misinterpreted as the yen strengthening, but rather a temporary bump before the wealth moves on to an even safer place.