Those who stand to lose the most from the estrangement with Mexico are the very people that the Trump administration says it hopes to protect. Promises to neutralize Mexican competition and bring back manufacturing jobs tipped swing states like Ohio, Pennsylvania, Michigan and Wisconsin into the president’s column. Disenchanted citizens placed their bets on protectionism, and a somber inaugural address assured them they would be at the forefront of the new administration’s policies.
But any such assurance relies on a pervasive misunderstanding of our commercial relationship with Mexico. Americans — and especially working Americans — only stand to lose from a souring of this relationship.
Somehow, in the last few months, our southern neighbor has been converted from friend to adversary. The reality could not be more different. We work together on issues ranging from intelligence-sharing to the border. And a hit on our commercial ties will bring immediate economic pain.
Our third largest trading partner, Mexico has become integral to the U.S. economy. We trade over $1.5 billion in goods and services each day, and that number means just as much to Main Street as it does to Wall Street. American small and medium-sized enterprises export more to Mexico than to any other country.
To get a sense of just how much we rely on our close partnership with Mexico, look no further than the battleground states of America’s rust belt. Indiana and Wisconsin each have nearly 100,000 residents whose jobs depend on U.S.-Mexico trade. Michigan has nearly 140,000. Ohio, nearly 180,000. Pennsylvania has 200,000 people at risk of losing their jobs if we pull away from this trade relationship. From state to state, many workers don’t even realize that their jobs depend on Mexico.
But trade is only part of the picture. As Mexico’s economy developed over the last decades, the country’s businesses increasingly turned toward investing up north. The U.S. is now the main destination for Mexican foreign direct investment, with companies investing over $50 billion, and much of it in middle America.
(GRAPHIC: Wikimedia Commons)
Mexican-owned companies operate over 6,500 business establishments in the U.S., directly employing over 122,000 Americans in their plants, factories, and shops. These jobs are vital engines of economic activity in towns — big and small.
Take Grupo Bimbo, the world’s largest baked goods company, which employs over 550 people in its plant just 20 minutes east of Atlanta. Or drive an hour north of Philadelphia to Horsham, Pa., where Bimbo employs the equivalent of 3% of the town’s population. In Madison, Wis., another 450 people have their paychecks signed by the Mexican bakery.
And the list goes on. Halfway between Tulsa and Little Rock is the town of Fort Smith, Ark., where Mexican poultry producer Bachoco is the third largest employer, providing jobs to over 2,300 people through a subsidiary. Mexican cement producer CEMEX operates 13 cement plants and 420 ready-mix plants in the U.S. In Houston alone, the building materials giant employs over 2,600 people.
These are but a handful of the countless Mexican businesses providing a livelihood for American workers. Their proliferation throughout the U.S. has been a boon for our country, one that we could risk if we allow bravado to chip away at our longstanding partnership.
Modernizing NAFTA, a 23-year-old agreement inked before the tech boom, will help us to keep with the times. But gutting it, or allowing blustery rhetoric to push Mexico to look elsewhere for its trade and investment, will threaten the millions of U.S. jobs that depend on our deep commercial ties.
Mexico has already made clear that its patience is wearing thin. If we don’t come to the negotiating table ready to cooperate, one of our most crucial relationships will crumble. For the sake of communities across our great country, let’s not give Mexico reasons to do business with another competitor.
Jason Marczak is Director of the Latin America Economic Growth Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center, which leads the nonpartisan #WhyMexico Initiative.
