China or Mexico

Mexico is becoming the new China. Starting after the end of the cold war in 1990, China began its rise as the newest manufacturing model. Their big draw was low wages and companies from the West were willing to invest large sums to make products in China and sell them in the West were the consumers with money lived. The government of China, while maintaining its communist political side, recognized that the true economic growth was based on selling products to the West and in particular the US. They set up a pseudo free market and set government policies to encourage exports. It was a resounding success and the GDP of China went from $400 billion in 1990 to $11 trillion in 2015 a staggering 24% annual increase. The first signs of trouble came when US relations began to crumble. The West realized that shipping all of their production to China was a national defense problem. During this period labor cost in China tripled and by 2019 the average wage in China was $4.50 compared to Mexico at $3.95. Thus started the great process of near shoring and reshoring. During this time period the cost of the standard 40-foot shipping container from China to the US increased from $3000 to $18000 or a six-fold increase. People became concerned that important products like pharmaceuticals were no longer made in America. Trade deals with China and Mexico gave a big edge to Mexico. The US has now undertaken steps to reduce the drug traffic from Mexico and offer safety to trade routes. The trade deficit with China declined from $295 billion in 2024 to $202 billion in 2025 while the deficit with Mexico increased from $175 billion in 2024 to $197 billion in 2025. This trend is expected to continue as the US builds up its industrial base as it brings back manufacturing jobs back home. This process of America First is taking place in many industries where the US can no longer rely on foreign countries for necessary goods.