The bond between China and Mexico continues to go from strength to strength, with further growth in trade between the nations predicted in 2025.
To date, China’s attempts to circumvent US tariffs on its exports are succeeding, with imports into Mexico maintaining a robust pace throughout 2024. As of August, China exported US$8.57bn of goods to Mexico, a 12.3% increase year-on-year.
Although Mexico has sought to preserve its relationship with the US and redress a trade imbalance with China by imposing its own tariffs, shifts in the global supply chain indicate that will not hamper relations between the two. Indeed, the growth in trade is backed by infrastructure investments and a growing number of initiatives from shipping majors.
Of the latter, the Dalian-Mexico container express service is the most significant. Introduced by COSCO Shipping in July 2024, the route was created to improve efficiency between Dalian and key Mexican ports, cutting 10 days off traditional transshipments. Elsewhere COSCO’s TLP5, launched in early 2024, offers a direct link between key Asian ports and key Mexican ports, like Manzanillo and Ensenada.
Similarly CMA CGM and MSC both have direct services to accommodate the surging demand for Mexican manufacturing and distribution centres created by nearshoring. Meanwhile, the Qingdao to Mexico service, launched in Q1 of 2024, has contributed to the double-digit growth in container throughput between China and Mexico.
The direct routes and services have reduced reliance on transshipment in the region, cutting costs and shipping time, which benefits high volume shippers. In turn the routes are reducing dependency on US ports and are alleviating congestion in Mexico where several ports are being upgraded to accommodate larger volumes.
In that respect, the China-Mexico trade relationship will continue to influence global shipping throughout 2025 and beyond, driving multiple strategic changes – the most likely outcome of which is shipping lanes diversifying further, reducing pressure on the Panama Canal and US West Coast in particular.
Of particular note is Mexico’s Interoceanic corridor which will provide an alternative transport route between the Pacific and Gulf of Mexico, the net result of which will be a redistribution of volume across the Americas.
Though not yet fully operational, the corridor will hit key milestones in the coming 12 months, with the Ports of Salina Cruz on the Pacific Coast and Coatzacoalcos on the Gulf coming online. This will streamline cargo transfer across the corridor and further enhance trade efficiency with Asia, giving countries in the latter diversified access to the East Coast of the US.
As 2024 comes to an end, there is little doubt that the China-Mexico trade partnership is strengthening. The projected surge in 2025 is fuelled by changes to strategic shipping routes, infrastructure upgrades and direct services.
China’s continued bypassing of US tariffs through robust exports to Mexico and the introduction of direct shipping lanes reduces dependency on US ports, alleviating congestions and driving down costs in the process.
Meanwhile, the Interoceanic trade corridor will enhance trade, creating an efficient link between the Pacific and Gulf of Mexico and redistributing trade across the Americas. Together, these developments indicate a deepening of the relationship between China and Mexico, with broad impacts of global shipping and the US West Coast in particular.
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Source: Ti Insight
Author: Tom Holmes
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