Attempts to change the flow of goods and services across the U.S.–Mexican border could have significant sectoral implications. The Office of the United States Trade Representative reports that most of the two-way trade between the U.S. and Mexico is in goods. Table 1 shows a breakdown of the key goods and services that flow between the U.S. and Mexico. The largest dollar volume of trade between the U.S. and Mexico takes place in three key two-way trades – in vehicles, machinery, and electrical machinery. The main one-way U.S. export to Mexico is in beef and beef-related products, while the main one-way imports from Mexico are in mineral fuels, optical and medical instruments, and agricultural products; and in the aggregate, these one-way trade flows are relatively small.
As mentioned earlier, Mexico is one of the three main U.S. trading partners in addition to Canada and China. As Figure 4 shows, China has recently eclipsed Canada as the U.S.’s largest trading partner; and together the three largest partners accounted in 2015 for 46 percent of U.S. total trade (exports plus imports).
Surprisingly, in the case of China, while the U.S. does have a trade deficit of $366 billion, that deficit was only 2 percent of U.S. GDP in 2015. Interestingly, our next largest dollar trade deficits, shown in Figure 5, are not with either Canada or Mexico but with Germany and Japan. Even these deficits are less than 0.5 percent of U.S. GDP.