U.S. Enjoying a Record-Trade Surplus With Mexico

MEXICO CITY, MEXICO – U.S terms of trade with Mexico advanced 4.9 percent for the year ended in March 2021, the largest year-over-year increase since the index was first published in December 2017.

According to the U.S. Bureau of Labor Statistics, higher export prices to Mexico more than offset price increases for imports from Mexico, driving up the U.S. terms of trade between March of 2020 and March of this year. Prices for exports to Mexico advanced 9.3 percent over the past year, while import prices from Mexico rose 4.2 percent.

The 12-month increase in U.S. terms of trade with Mexico was partly driven by a 5.5 percent advance from December to March, the largest three-month increase in the history of the index.

The terms of trade index for Mexico provides information on the price for exports to our southern neighbor, and how those export prices compare to prices for imports coming from the country. Prices for exports and imports are measured in U.S. dollars, so exchange rates are already taken into account. The terms of trade index for Mexico is developed by dividing the Mexico export index by the Mexico import index, then multiplying by 100. An increase in the terms of trade index means prices for exports to Mexico are rising faster than prices for imports from the country.
(SOURCE: All Ag News)