How a 25% Tariff with Mexico Could Undermine U.S. Tech Export Gains
The U.S. has made significant gains in standalone computer processing unit (CPU) exports, supported by North American supply chain integration and recent policy measures like the CHIPS Act, which aim to bolster domestic semiconductor manufacturing. In September 2024, U.S. CPU exports surged to $1.54 billion—matching China’s output for the first time. This success reflects rising global demand for U.S. technology, particularly in Asia and Europe.
However, this progress relies heavily on seamless trade with Mexico and Canada. Components made in Mexico often return to the U.S. for assembly before being exported as finished products. For instance, in September 2024, the U.S. exported $2.44 billion in data processing machine parts—a 153% year-over-year increase—with $1.65 billion destined for Mexico. That same month, U.S.-Mexico trade in CPUs and related parts totaled $6.71 billion, surpassing the trade of traditional goods like cars, trucks, and petroleum products.
A proposed 25% tariff on imports from Mexico could disrupt this supply chain, raising costs, delaying production, and reducing the competitiveness of U.S. tech in global markets. This cross-border integration lowers production costs and ensures rapid assembly and export of high-tech goods, a critical advantage in a globally competitive market. Increased costs and delays could ripple across industries, from AI development to industrial automation, eroding the competitive edge of U.S. technology.
Leading U.S. tech companies depend on Mexico for cost-effective manufacturing and assembly processes. The visualization below from the Observatory of Economic Complexity (oec.world) illustrates the stakes—how integrated supply chains have fueled U.S. tech export growth.
🔍 Should the U.S. risk disrupting these partnerships at such a critical moment for its tech industry?
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