As Mexico, Canada and the United States prepare for the 2026 review of NAFTA’s successor, the United States-Mexico-Canada Agreement (USMCA), China appears likely to occupy a place important on the agenda, at least as far as the Mexicans are concerned. . Mexico’s new president, Claudia Sheinbaum, has made clear through her deputy commerce minister, Luis Rosendo Gutierrez, that her country’s top priority is to reduce its dependence on Chinese imports and meet Mexico’s needs to support its “own national supply chains.” This kind of language sounds a lot like what Washington says to describe America’s needs. With this, Mexico could not signal more clearly that it is ready to join the United States and Canada in limiting China’s trade access to North America.

Two questions dominate Mexico’s China problem. The first is how the increasing quantity and sophistication of Chinese imports have made Mexico increasingly dependent on China. The other is the appearance that Chinese companies are avoiding U.S. tariffs on Chinese goods by using Mexico as a middleman for their goods. Gutierrez denied that Mexico is a “stepping stone from Asia to the United States,” but he also cannot deny that his country hosts a large number of Chinese operations or that growing Mexican sales to the United States Unis includes many Chinese products. factories sometimes operated in Mexico and which also contain inputs from China. The government in Mexico City has made clear that it would very much like to replace these Chinese facilities with the operations of U.S.-based companies, although it has so far struggled to make that effort a reality.

Even setting aside the issue of tariff avoidance, there is no denying Mexico’s worrying dependence on Chinese trade. According to Mexican government statisticsMexican imports from China have increased by an amount equivalent to $45 billion since 2015, while Mexican exports to China have increased by only $5 billion. Mexico’s trade deficit with China has nearly doubled during this period, from the equivalent of $65 billion in 2015 to more than $110 billion earlier this year. Chinese products alone account for a fifth of all Mexican imports, and about 70 percent of those products go to just 50 companies operating in Mexico, nearly half of which are based in China.

Until now, Mexico City has initiated few formal interactions on this subject with Washington or Ottawa, its partners in the USMCA. This is hardly surprising. President Sheinbaum has just taken office. The Mexican government, however, has informally reached out to the U.S. business community, particularly automakers, semiconductor makers, aerospace firms, and electronics companies, to find substitutes for Chinese operations in Mexico and goods that Mexico currently imports from Asia, in particular. Malaysia, Vietnam and especially China. President Sheinbaum and Vice Minister Gutierrez undoubtedly hope to capture for the benefit of Mexico companies based in the United States which are actively seeking to diversify their trade outside of China. Such an outcome would both strengthen Mexico’s position within the USMCA and relieve the country of its current dependence on China.

There is no doubt that in the months leading up to the USMCA review in 2026, Mexico will make more formal representations to Washington and Ottawa. Given the hostility that the United States and Canada have shown toward Chinese trade in the form of high tariffs and other restrictive policies, there is no doubt that Mexico will find partners willing to support his efforts. Whatever the final specifics in North America, China appears poised to lose.