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For at least 34 years, Canada held an unbroken grip on the top spot in US trade. In 2025, Mexico ended it, and the timing could hardly be more consequential.
According to reports from Bloomberg and Forbes, Mexico finished 2025 as the leading destination for US merchandise exports, the largest source of US imports and, by extension, the dominant overall US trade partner – a clean sweep no country has achieved since Canada managed it in 2006. It accounted for 15.6% of total US two-way goods trade, more than double China's 7.4%, in a transformation that has unfolded remarkably quickly. Five years ago, as USMCA was being implemented, China led all US trading partners with nearly 15% of total trade. Today, the Asian superpower ranks third.
The numbers alone tell only part of the story. The top US exports to Mexico – refined petroleum, motor vehicle parts, computer components, computers and semiconductors – reflect an industrial relationship built around shared supply chains under the nearshoring model rather than simply consumer demand. On the import side, four of the five biggest categories are tied to the North American automotive industry. Mexico is not so much a trading partner as a production partner.
Yet the relationship faces its most fraught political test in years. US President Donald Trump has reportedly asked aides why he should not withdraw from USMCA, the trade agreement he championed in 2020, ahead of the treaty's mandatory six-year review deadline of July 1. He could technically do so with six months' notice. Bloomberg columnist Juan Pablo Spinetto argues this would amount to a self-inflicted wound: abandoning USMCA would disrupt supply chains, threaten American manufacturing jobs, push up import prices on everything from cars to avocados and trigger backlash from the US Chamber of Commerce and bipartisan Congressional supporters of the pact.
The peso barely moved after reports of Trump's deliberations emerged, suggesting investors assign low probability to a full withdrawal. But the uncertainty itself carries costs, potentially dampening investment flows into Mexico and prolonging the kind of instability that has already weighed on the country's 0.8% GDP growth in 2025.
Integration between the two countries runs much deeper than trade statistics capture. Mexicans living in the US send home more than $60bn per year in remittances. Mexico is the top foreign destination for American tourists. In New Mexico, California and Texas, Latinos are now the largest population group. In parallel, a growing wave of American expats relocating to Mexico is reshaping neighbourhoods from Baja California to Mexico City.
The strategic logic, Spinetto argues, is difficult to escape. If Washington is serious about decoupling from China, reindustrialising its economy and securing critical supply chains, Mexico is not the obstacle, but rather a central part of the solution. Mexico's share of US trade has more than doubled relative to China's in five years, driven not by political goodwill but by geography, manufacturing integration and demographic reality. Those are not conditions that dissolve overnight when a trade agreement is threatened.
Whether that case gets made clearly in the White House, or gets lost in the noise of erratic tariff threats and negotiating posture, may be the defining question of the USMCA review.
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