Mexico now biggest US trading partner, data shows

Mexico now biggest US trading partner, data shows
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Mexico has now become the biggest U.S. trading partner, jumping ahead of Canada and China that have previously held the top spot, according to recent government data.

Transactions with Mexico made up 15 percent of U.S. trade in February, according to federal data released last week, edging out Canada at 14.2 percent and China at 13.9 percent.

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Mexico's emergence as the largest U.S. trading partner highlights the stakes of President TrumpDonald TrumpCuban embassy in Paris attacked by gasoline bombs Trump Jr. inches past DeSantis as most popular GOP figure in new poll: Axios Trump endorses Ken Paxton over George P. Bush in Texas attorney general race MORE's push to win congressional approval for a new North American Free Trade Agreement (NAFTA).

Trump, Canadian Prime Minister Justin TrudeauJustin Pierre James TrudeauBiden administration stokes frustration over Canada The Hill's 12:30 Report - Presented by Goldman Sachs - Schumer moves ahead with likely-to-fail infrastructure vote US extends travel restrictions with Canada, Mexico MORE and former Mexican President Enrique Peña Nieto agreed in September to an updated version of NAFTA. The new deal, called the U.S., Mexico, Canada Agreement (USMCA), is pending legislative approval in all three countries and faces long odds in the Democratic-controlled House.

Democratic lawmakers, including Speaker Nancy PelosiNancy PelosiHouse rejects GOP effort to seat McCarthy's picks for Jan. 6 panel GOP brawls over Trump on eve of first Jan. 6 hearing Five things to watch as Jan. 6 panel begins its work MORE (D-Calif.), have demanded tougher labor, environmental and enforcement provisions to prevent future U.S. job losses.

While some of these issues could be addressed in follow-up legislation, others would require a renegotiation of the deal itself. The Trump administration has rules out further talks, and Republicans have called on Democrats to accept the deal proposed by the president.

Trump has been fiercely critical of previous U.S. trade deals including NAFTA, which he’s called the “worst” trade agreement in American history. The president has pledged to pull the U.S. out of NAFTA if the USMCA is not approved by Congress, threatening the continent with a massive economic calamity.

The U.S., Mexican and Canadian economies have become closely integrated since NAFTA’s 1994 enactment. Companies in each country send parts and products back and forth through a continental supply chain that would be severely disrupted without a free trade agreement.

Leaving NAFTA would also lead to drastic increases in prices for food and consumer goods, a potential political nightmare for the president as he seeks reelection.