There is likely no trade relation quite like that of US and Mexico—and 2024 is the year to prove it. The two countries share one of the largest borders in the world and, for years, they’ve adapted their economies to one another. The relationship is so vast that last year, Mexico finally surpassed China as the largest trade partner to the US—despite having 9% of the population of China, and an economy basically a tenth in size.

To put it plainly, Mexico is the largest trade partner to the largest economy in the world. Their trade relation, in turn, is one of the most important to the modern economy. However, when we speak of the US-Mexico relation, we often focus on the impact the former has on the latter—namely, just how much the US impacts Mexico’s economy. Yet, given how large trade between the two economies is, one can only expect for Mexico to have a proportional impact on the U.S. economy.

In this essay, we turn the common focus of this relation on its head. Instead of looking at how the US impacts Mexico—which, it does—we focus on how Mexico impacts the U.S. Namely, how much does Mexico weigh in the U.S. economy and how these impacts are spread across the country.

I. The Proportion of Impact

Let’s start by addressing the elephant in the room. It is true that the relationship between Mexico and the U.S. is disproportionate—such could be expected given that the U.S. economy is 15 times that of Mexico. In the figure below, we plotted Mexico’s 2023 exports according to the Observatory of Economic Complexity (OEC) by the destination country. As the figure shows, a full 75.76% of all Mexican exports are headed to the U.S. Canada, the second largest export destination for Mexico, only accounts for 5.4% of exports from Mexico. 

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The same, however, is not true of the U.S. In the next figure, we plotted the origin of US imports for the same year. Mexico is the largest trade partner to the U.S.—that much is true. But the totality of Mexican exports to the country account for just 15.2% of U.S. imports. A number which is close to the share of U.S. imports from China (14.5%) and Canada (13.6%).

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Yet even if the relationship is skewed, it is still a booming relationship. One that, in fact, has grown to great proportions in recent years as the U.S. seeks to shift supply chains away from China—a pattern shared by various developed economies commonly referred to as “nearshoring.” Given Mexico’s existing relationship with the U.S. and close proximity, it has become a natural replacement for China, not to mention the similarity in terms of manufacturing capabilities while keeping lower labor costs.

Given these trends, US-Mexico trade has grown exponentially in recent years. In the figure below, we show Mexico's imports and exports to the U.S. since 2006. In that nearly 20 year period, Mexican imports from the U.S. have grown by 112%. Meanwhile, Mexican exports have grown by 122%. In the same period, both imports and exports have more than doubled between the two countries.

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II. Economic Impact

But what’s most interesting is that the impact of this increase in trade with Mexico is not evenly distributed across the U.S. In the following map, we focus on a smaller period between 2019 and 2023. In it, we plotted the change in imports from Mexico by U.S. states. As the figure shows, all but 10 states actually saw considerable increases when it comes to Mexican imports. The largest change, by far, was the state of Delaware with a 268.47% increase in Mexican imports. It was followed by Louisiana (137.5% increase) and Virginia (115.38%).

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U.S. exports to Mexico, on the other hand, were far more homogenous. In the figure below—replicating the preceding map—we plotted the change in exports to Mexico by US State between 2019 and 2023. Here, Alaska and Oregon saw the largest increases in exports to Mexico with over 1,000% increases each—likely suggesting that trade between these states and Mexico was basically nonexistent beforehand.

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Now, since the above maps focus on the change of imports and exports, they fail to show just how relevant Mexican trade might be to each state in the U.S. To address this, in the next map we plotted what share of a state’s GDP is equivalent to the value of their specific trade with Mexico. This gives a better idea of how and where Mexico impacts the U.S. 

Not surprisingly, in large states like Texas and California, despite trading millions with Mexico each year, trade with the country accounts for less than 0.001% of GDP—a result of their large economies more than a disregard for Mexico. But, what’s most interesting is how some smaller states depend on Mexico to a large degree. By far, the most dependant states on Mexican trade are New Hampshire, where trade with the country accounts for 1.03% of state GDP, followed by North Dakota (0.97% of state GDP) and South Dakota (0.81%). There is also an interesting geographic concentration in the north west of the US, from Oregon—which, again, saw a drastic increase in exports to Mexico—all the way to Nebraska. Also, an interesting concentration occurs in the three states in the U.S. Northeast (Maine, New Hampshire, and Vermont).

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III. Political Impact

As a form of influence, we were interested in testing if there were any political patterns that resulted from U.S.-Mexico Trade. In particular, if a state’s political tendencies shared any relation with Mexico trade. Since the U.S. has a steady two party system, it is rather straightforward to categorize each state as either red (for republican), blue (for democrat), or purple (for states where margins could favor either party in an election).

We proceeded to calculate the total trade balance for red, blue, and purple states, and plotted them in the figure below. Interestingly, there is quite a difference between political affiliation and whether a state runs a deficit or a surplus. Blue states, as a group, run large surpluses with Mexico—meaning they export more than they import. Red States, on the other hand, run deficits which—namely, they import more than they export from Mexico. Purple states run a smaller surplus.

A similar pattern is true if we look at the average surplus or deficit of Red, Blue and Purple states. The average Blue state runs a $52.6 million surplus with Mexico while Red states run an average deficit of $6.8 million. The one change is that, on average, Purple states do have a larger deficit at $13.9 million—surpassing Red states.

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We wanted to go further on this, so we decided to look at whether the recent increase in trade with Mexico had a noticeable effect on U.S. politics. More specifically, if changes in Mexican trade had any effect on the results of the recent U.S. election—and support to republican candidate, Donald Trump, who ran on a hostile campaign against Mexico.

We found no statistical relationship between the change in Trump vote and the change of Mexican imports or the overall total deficit. However, we did find a statistically significant relationship between the growth in exports and the rise of Trump votes (with a p value of 0.035, below the standard 0.05 threshold for significance). Meaning that in states where exports to Mexico grew between 2020 and 2024, so did support for the Republican party.

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In all, this research suggests that Mexico does hold some prominent influence on the U.S. economy. Although it is true that the US influences Mexico to a much larger degree, there are certain states in the union that are particularly sensitive to Mexican trade. Not to mention that the U.S. political landscape has become sensitive to Mexican commerce as we showed in the last section of this essay.