New Mexico is recovering from a postelection dip in exports to Mexico, according to trade experts.
President Donald Trump’s America-first trade policies took a bite out of the state’s surging exports to its southern neighbor last fall and over the winter, The Albuquerque Journal reported (http://bit.ly/2vKCpYZ ).
Statistics from the U.S. Commerce Department revealed a 9 percent drop in the first half of 2017 compared with the same period last year. Exports to Mexico totaled more than $810 million from January to June, down from $890 million for the first half of 2016.
While the state has yet to fully recover from the postelection downturn, Jerry Pacheco with the International Business Accelerator at Santa Teresa says it has generally gone back to business as usual with companies either holding steady or climbing in sales.
“From about November to February, things were practically dead as everyone struggled to understand what was going on, and many companies froze their inventories,” Pacheco said. “But after February, people decided to get on with life.”
New Mexico’s total global exports were down by about 11 percent in the first half of 2017, from $1.96 billion to $1.74 billion, thanks largely to a plunge in sales to Israel this year. Exports to Israel fell from $314.3 million in first-half 2016 to just $6.8 million this year, generally reflecting the ups and downs of sales from Intel Corp.’s computer chip manufacturing plant in Rio Rancho.
The Commerce Department reported this week that the nation’s trade gap reached $43.7 billion in July, up from $43.5 billion in June. Overall exports declined $600 million to $194.4 billion, while imports slid $400 million to $238.1 billion.
The Commerce Department doesn’t publish quarterly statistics that might show an upswing in exports to Mexico in the second quarter, but sales for the first half of 2017 already surpass more than half of the total $1.58 billion that New Mexico exported across the border in 2016.
“At the current pace, we expect to do at least as much if not more than last year,” Pacheco said.
That reflects renewed confidence among export businesses about renegotiation of the North American Free Trade Agreement. Trump has pushed Canada and Mexico to renegotiate the pact, which he argues encourages American companies to relocate to Mexico.
Border businesses are more confident now, said Robert Queen, director of the Commerce Department’s New Mexico Export Assistance Center in El Paso, Texas.
“Early this year, there was a lot of concern,” Queen said. “But now that we’re into negotiations, businesses are more comfortable and eager to see a final deal.”