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Prolonged US-China trade war could hurt Mexico trade in long run

US-Mexico: Trans-border truck freight was down 1 percent in June

Data from the US Department of Transportation’s Bureau of Transportation Statistics released last week showed that cross-border truck freight with Mexico dipped 1 percent in June, compared to the same period in 2018.

The new data reported that trans-border trucks carried freight totaling $66 billion for the month of June, with trucks accounting for 63 percent of all freight between the US, Mexico, and Canada.

Trans-border truck freight between the United States and Mexico totaled $36 billion (70 percent of all southern border freight) for the month of June, declining around 1 percent compared to the same time last year. In May, truck freight volume was up 4.3 percent along the US-Mexico border, compared to the same period a year ago.

The three busiest truck border ports (46 percent of total trans-border truck freight) were Laredo ($15.2 billion), Detroit ($9.4 billion) and El Paso ($5.5 billion).

At Port Laredo, trans-border truck trade declined from $16.3 billion in May to $15.2 billion in June. The Port of El Paso also dipped from $5.9 billion in May to $5.5 billion in June.

Trade experts said that President Donald Trump’s ongoing dispute with China’s president, Xi Jinping, over tariffs could have a negative effect on ports like Laredo, El Paso and others that rely on daily freight trade.

The spike in volume was most likely due to the Labor Day weekend, as importers worked to get freight/goods produced in Mexico into the US before the holiday.

In the long-run, the trade war between the US and China can have a negative impact on the US economy and that would hurt Mexico’s exports since we are so integrated with the US. An example could be tomatoes, a long-time powerhouse product that has been one of the drivers of business at ports of entries such as Nogales, Laredo and McAllen. However, Trump’s tomato dumping investigation against Mexico and subsequent tariffs hurt imports.

The US imports more than 80 percent of its fresh tomatoes from Mexico, and more than 50 percent of Mexican tomatoes come through Texas. Imports of tomatoes rose 5.44 percent at Port Laredo compared to last year to $286.85 million.

However, imports of fresh tomatoes at McAllen’s Pharr-Reynosa International Bridge along the US-Mexico border declined more than 11 percent compared to last year for the month of June to $264.54 million.

Source: freightwaves.com


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