Trade Matters: A Look at the Arizona-Mexico Trade Relationship

Author(s):
Alisha Kim, Research Economist
Published:
11-14-2019

Mexico became the #1 trading partner of the U.S. in 2019, surpassing China for the first time ever. However, Mexico has long been Arizona’s #1 trading partner. As shown in Figure 1, Arizona exported $22.5 billion in goods to the world in 2018, up more than $1.5 billion, or 7.6%, from the previous year. From that total, $7.7 billion (34.2%) of those Arizona origin exports went to Mexico, up marginally by 1.0% from 2017, but down 16.5% from a 2015 peak of $9.2 billion. Click play to watch Figure 1 in action and see Mexico’s status as Arizona’s #1 export destination grow over time compared to its competitors.

Figure 1: Arizona Exports to the World (2002-2018)

 

Figure 2 displays all U.S. exports to Mexico by state, revealing that Arizona has the sixth largest amount of exports to Mexico of the 50 U.S. states. Texas is first with more than $109 billion, 41.8% of all U.S. exports to Mexico in 2018, followed by California, Michigan, Illinois, and Louisiana. Arizona exports to Mexico are only 2.9% of all U.S. exports to Mexico, despite being such a large share of Arizona total exports to the world.

Figure 2: U.S. Exports to Mexico by State (2018)

Trade is a two-way street and in 2018, Arizona imported $22.4 billion in goods from 176 different countries, with the top 25 import origin countries shown in Figure 3. Total Arizona imports were up 9.4% from a year ago. The largest share of Arizona’s 2018 imports, $9.0 billion or 40.3%, came from Mexico, with China second and Canada third.

Figure 3: Top 25 Arizona Import Origin Countries (2018)

Mexico is also a popular import origin country for the U.S., which as a whole imported $346.1 billion from Mexico in 2018, up 10.6% from a year ago. Despite Mexican imports representing such a large share of Arizona’s total imports, they account for only 2.6% of all U.S. imports from our southern neighbor. In comparison, Texas accounts for 30.9% of all U.S. imports from Mexico. Figure 4 displays all U.S. imports from Mexico by state, with Arizona ranking sixth behind Texas, Michigan, California, Illinois, and Ohio. Michigan ranks highly in both Mexican imports and exports because of its integration into the North American automotive supply chain, otherwise known as “Auto Alley”.

Figure 4: U.S. Imports from Mexico by State (2018)

For a wealth of information and analysis on Arizona’s trade with Mexico, as well as commodity flows and border crossings through Arizona border ports of entry, visit the Arizona-Mexico Economic Indicators website or follow @UArizonaAZMex on Twitter.