The trade war between China and the U.S. has triggered a shift in global trading relationships that is already benefiting Washington's third largest trading partner-Mexico. CGTN's Alasdair Baverstock reports.

When Mexico agreed to curb the flow of migrants from Central America, it did more than avert more U.S. tariffs. It preserved its new status as Washington's top trading partner.

In the first five months of this year, Mexico took the number one spot away from China.

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

ALASDAIR BAVERSTOCK MEXICO CITY "Mexico's economy is sensitive to what's happening up north - the peso at times taking noticeable dives in reaction to a Donald Trump tweet. And, though, the U.S. President backed down from imposing a blanket tariff on all Mexican goods, the threat was enough to compel Mexico City to deploy over 20,000 troops to curtail Central American migration."

Economist Luis de la Calle says Mexico could emerge a big winner from the China-U.S. trade war.

LUIS DE LA CALLE ECONOMIST, COMEXI "I think these trade frictions between China and the U.S. might, in the end, help Mexico and China see each other differently."

The "frictions" have already shifted North-South commerce in Mexico's favor.

From January to May, the volume of trade between the U.S. and Mexico climbed to nearly 258 billion from almost 249 billion in the same period last year, an increase of 9 billion dollars.

A new COMEXI report says the China-U.S. impasse could also boost trade between China and Mexico.

LUIS DE LA CALLE ECONOMIST, COMEXI "The trade frictions between China and the U.S. will result in a diversion of trade flows. 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."

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

LUIS DE LA CALLE ECONOMIST, COMEXI "We can export agricultural products to the Chinese markets. China needs significant amounts of food, so it's a large importer, particularly in terms of meats, and Mexico is a good provider of those. We have the ability also to import grains from the U.S., and transform them into animal protein, and then sell them to China. So, it's a North American export, with Mexico functioning as an export platform."

But that's a best-case scenario for Mexico. Market analyst, Juan Carlos Minero, says the potential gains may never materialize if Beijing and Washington settle their differences.

JUAN CARLOS MINERO BLACK WALLSTREET CAPITAL "If they do reach an agreement, Mexico will be out of the table. We haven't seen a lot of China-Mexico relationship going from Mexico to China, but we have seen a lot of companies from China coming here to Mexico, trying to fight the U.S. tariffs."

So, there's no telling what will happen. As the world has witnessed, all it takes is just one Donald Trump tweet to disrupt global markets. Alasdair Baverstock, CGTN, Mexico City.