Does made in Mexico mean made by China?

Donald Trump believes Mexico is a trojan horse for Chinese mercantilism.

- 

In 2018 United States President Donald Trump started a trade war with China. Mexico benefited; companies seeking to avoid tariffs by diversifying production out of China saw the country as a good option thanks to affordable labour, decent infrastructure and, most importantly, its free-trade agreement with the United States. As Trump's second term approaches, that logic is souring. Chinese companies looked to Mexico more than most. Their investment in the country has surged. Trump (who has already threatened to apply a tariff of 25 per cent to Mexican imports "on day one" unless it stops migrants and drugs from illegally crossing the border) believes those firms are using Mexico as a tariff-free gateway to the US. His conviction may end up blowing apart the United States-Mexico-Canada Free Trade Agreement (USMCA).

Concerns about Chinese activity in Mexico are bipartisan and long-running. In 2019 American officials worried that Chinese exporters were simply using Mexico as a route to the United States market, especially for steel and aluminium. This has largely been dealt with by Mexico imposing tariffs on imports of the metals from China, and a "melt and pour" rule that requires steel to be "substantially transformed" in Mexico before it is exported to the United States. Outright fraud where products are imported from China, relabelled as Made in Mexico, then exported to the United States is probably rare.

Today the focus is on Chinese firms assembling or manufacturing products in Mexico for sale in the United States. There is plenty of this happening. In 2023 Mexico overtook China to become the leading exporter of goods to the United States; meanwhile, Chinese exports to Mexico have boomed. In 2002, Mexican exports to the United States contained less than 5 per cent Chinese components by value. By 2020 that number was 21 per cent.