By Adina Moloman
Mexican trade accounts for approximately 4.9 million jobs in the US. Unfortunately, leaders on the US political front are not always cognizant of the facts governing this highly complex partnership between the two North American countries. Mexico creates US jobs, but those jobs depend on upon a system of cooperation that could disappear without care for a better understanding of this unique relationship.
Listening to US political rhetoric leaves one with a general fear that Mexico is taking away US jobs. Some of the measures being called for include:
- Imposing 35% tariffs on Mexico
- Blocking remittances to Mexico from workers in the US
- Building a border wall to stop the influx of Mexican immigrants
- Abrogating NAFTA
In addition to be unrealistic and misleading, these mischaracterizations of the economic situation in North America overlook the fact that Mexico creates US jobs. 4.9 million US jobs depend on a healthy relationship and cooperative partnership with the manufacturing country. The threat is that remarks and intentions expressed in recent, national politics in the US could spark a trade war with Mexico and China. And this sort of a trade war could cost the US up to 4.8 million jobs here at home, according to a study recently released by the Peterson Institute of International Economics.
How Mexico Creates US Jobs
According to a project by the Woodrow Wilson Center’s Mexico Institute, approximately 4.9 million US jobs depend on trade with Mexico. Mexican manufactured goods typically use approximately 40% of their inputs from US manufacturers. In Chinese goods, that number is 2%, and in the European Union, it’s only 2%. Because Mexico has duty-free access to US products, the country relies heavily on US-made parts to produce the finished product. This means Mexico’s gain is also a gain for the US.
This a real and tangible link between the two countries. In 13 US states, at least 100,000 net manufacturing and service jobs come from trade with Mexico – and that number is over 300,000 in several states. Each and every minute, over $1 million USD in trade crosses the US-Mexican border, accounting for an annual trade total of nearly $600 million USD. This is dramatically higher than the rate of US trade with the rest of the world.
Political discussions of how to improve the jobs situation in the US should keep in focus the fact that Mexico creates US jobs. Politicians should note that approximately 57,000 US companies employing 4.9 million workers depend on a healthy and ongoing trade partnership with Mexico.