What does China-U.S. trade war mean for Mexico?
Alasdair Baverstock

The ongoing trade conflict between China and the U.S. is shifting global trading relationships.

As the Donald Trump administration pursues its aggressive stance of imposing tariffs, other countries are beginning to benefit.

Vietnam has already been named the biggest winner of the China-U.S. trade war. And for Mexico, now America's largest trading partner, there's scope to do the same.

At the end of June, President Trump threatened the U.S.' southern neighbor with blanket tariffs across all Mexican imports, unless Mexico took a stronger stance on Central American migration.

Mexico City immediately sent a delegation to Washington to negotiate, and eventually deployed over 20,000 troops to its northern and southern borders.

In doing this, it not only averted the tariffs. It preserved its new status as Washington's top trading partner.

Despite the Mexican economy's sensitivity to American policies, in the first five months of this year, Mexico took the U.S. number one trade spot away from China.

Luis de la Calle believes Mexico can take advantage of the U.S.-China tariffs situation by expanding into China. /CGTN Photo

Luis de la Calle believes Mexico can take advantage of the U.S.-China tariffs situation by expanding into China. /CGTN Photo

From January to May, the volume of trade between the U.S. and Mexico climbed to nearly 258 billion U.S. dollars from almost 249 billion U.S. dollars in the same period last year, an increase of nine billion dollars.

This new economic reality left Washington's southern neighbor few options — at least in the short term.

"I think these trade frictions between China and the U.S. might, in the end, help Mexico and China see each other differently," said Luis de la Calle, an economist and author of a new study that says Mexico must now also take advantage of the situation to expand into the Chinese market.

The report says Mexico could emerge as a big winner from the China-U.S. trade war, as Mexico seeks to boost trade in Asia.

"The trade frictions between China and the U.S. will result in a diversion of trade flows," Luis told CGTN in an interview. "So, it's a question as to which countries might benefit from it. The truth is that Mexico will receive some of those benefits, because Mexico is a good diversification for Chinese risk."

Beijing is also set to benefit from increased trade with Mexico.

If the conflict escalates, China could impose retaliatory tariffs on U.S. agricultural exports. Mexico could provide an alternate source of meat and produce.