Mexico overtakes China as top US tech supplier amid export boom
BBVA México reports machinery and electronics exports have doubled to $200 billion, while the Economics Observatory notes Mexico’s share of US advanced tech imports has reached a record 17 per cent.
Mexico has surpassed China as the leading supplier of advanced technology products to the United States, marking a significant structural shift in North American trade flows. According to the Economics Observatory, Mexico’s share of US imports in this sector reached a record 17 per cent in early 2026, more than double China’s 7.2 per cent. This transition is underpinned by a surge in exports of machinery and electronics, which have doubled to approximately $200 billion over the past few years.
BBVA México, the country’s largest financial institution, attributes this expansion to massive capital expenditure by US technology firms on artificial intelligence infrastructure and data centres. The bank’s economists noted that exports under Harmonized System Chapter 84, which covers machinery and data-processing equipment, are now highly correlated with spending by hyperscalers such as Microsoft, Alphabet, Meta and Amazon. Consequently, Mexico’s trade surplus in this category is driven almost entirely by computer exports, signalling a developing comparative advantage in the sector.
The competitive edge is largely defined by the United States-Mexico-Canada Agreement (USMCA). While global trade barriers have risen, with US tariffs reaching their highest levels since the 1960s, Mexico benefits from preferential access. By the end of 2025, Mexico faced an effective US tariff rate of less than 5 per cent, compared with approximately 33 per cent for China and a US average of 10 per cent. Approximately 88 per cent of Mexican goods already enter the US duty-free under the agreement, providing a critical incentive for manufacturers relocating supply chains from Asia.
Investment activity reflects this strategic realignment. SpaceX announced a $16.8 billion investment to build a vertically integrated semiconductor fabrication plant, known as Terafab, in Grimes County, Texas. The 100 million-square-foot facility will consolidate logic chip production, memory and advanced packaging, creating 3,000 jobs. Concurrently, Taiwanese electronics manufacturer Inventec plans a $450 million expansion in Ciudad Juárez, Chihuahua, which could generate up to 6,000 jobs in server and AI product manufacturing.
Despite the robust trade data, uncertainty surrounds the longevity of the USMCA framework. During the current joint review, the US declined to extend the agreement through 2042, opting instead for annual reviews until its scheduled expiration in 2036. While the current rules remain unchanged, the near-term outlook depends on how companies assess the durability of North American trade policies. BBVA economists cautioned that while the export boom is evident, it remains to be seen whether these trade flows will translate into broader nearshoring investment and sustained economic growth.
