Mexico's Economic Rise Shifts Power from the US | Richard D. Wolff

Mexico, often viewed as dependent on the US, holds a significant edge in the global economy, with the US relying more on Mexico than most Americans realize. Beyond avocados and automobiles, Mexico is a vital hub for US supply chains in electronics, pharmaceuticals, automotive, aerospace, medical devices, textiles, consumer goods, and information/communications technology. As the US depends on Mexico, Mexico has strategically built leverage, shifting focus from politics to economics.

 

The Power Problem: Nearshoring and Mexico’s energy sector.

Mexico’s rise as an economic powerhouse challenges its subordinate image. Its leverage in trade, energy, and geopolitics makes it vital to the US. Rising labor and environmental demands could disrupt supply chains. The era of US dominance is fading, replaced by interdependence, and Mexico wields unprecedented influence. A fracture in this delicate relationship could swiftly impact the US. 

 

Mexico, once a trade partner, is now a force reshaping trade and energy policies, catching the US unprepared. The US has long focused on migration and border security, overlooking intricate economic ties. Mexico is a cornerstone of US production, driven by cost-effective labor and trade agreements like the United States-Mexico-Canada Agreement (USMCA, 2020).

 

Mexico’s Manufacturing Momentum: Many well-established industrial clusters.

 

This dependency stems from lower wages and proximity, but this corporate strategy has created vulnerabilities. US companies’ reliance on Mexico’s manufacturing gives Mexico significant leverage. The North American Free Trade Agreement (NAFTA,1994) boosted trade but moved US factories to Mexico for cheaper labor, eroding American jobs. USMCA preserved this structure. Mexico, no longer just a low-cost hub, has diversified into energy, consumer markets, and geopolitics, prioritizing labor rights and domestic growth, threatening the cheap labor model and US supply chains.

 

 Puerto Manzanillo, Mexico's new trade hub on the Pacific, bypassing the Panama Canal.

 

US policies, like subsidized agricultural exports, have displaced Mexican farmers, driving migration. US firms’ job relocation to Mexico exploits low-wage workers, creating an underclass on both sides of the border, with migration as a symptom of economic disparities.

Mexico, a key US oil supplier, is asserting control over its energy resources, nationalizing and tightening oversight, challenging US corporations. Its push into renewables diversifies its portfolio, enhancing global leverage. Prioritizing domestic energy could disrupt US imports, forcing a strategic shift.

 Mexico has surpassed China as the top US trade partner.

 » In fact, the most direct and simplest way for the US to reindustrialize would be to 

militarily occupy Mexico and use it as a substitute for China in its economic system. «  

Mexican labor movements demand better wages and conditions, undermining the cheap labor model, potentially raising US consumer prices. Environmental activists push for sustainable practices, challenging resource exploitation.

 

Amid the US-China trade war, Mexico is a nearshoring hub, benefiting from USMCA and proximity. China’s investments in Mexico create a trade triangulation, with Chinese components assembled in Mexico for US export, bypassing tariffs. Mexico negotiates favorable terms with both powers, gaining strategic autonomy.

Reference:
Richard D. Wolff (September 17, 2025) - Mexico Is About to Change Everything for the US. (video)

 

 

Richard D. Wolff, American Marxist economist known for works like "Democracy at Work,"

is teaching at the University of Massachusetts Amherst and The New School.

 

See also:
TPR (January 24, 2025) - Mexico's Strategic Position in China's Maritime Silk Road of the Americas.

TPR (September 12, 2024) - Failed US Regime Change Attempt in Mexico. 

TPR (August 18, 2024) - Mexico Pivoting Away From Washington’s Grip. 
Andrés Manuel López Obrador (May 8, 2024) - The US is in Decline and Desperate Need to Modernize.

Looming US Supply Chains Shock in October 2024 | Lena Petrova

A devastating supply chain crisis is looming in the US, with 85,000 dock workers at 36 ports planning to start their strike on October 1st, demanding better pay and work conditions. This would impact 45-49% of US imports, affecting the entire country's port volume by over 40%. The strike would shut down five of the ten busiest ports in North America, including New York and New Jersey, which are already preparing for the strike. The strike is expected to cause shortages and delays, including retail, automotive, semiconductors, medicine and essentials, and a rise in prices due to consistent demand. A similar 11-day strike in 2002 caused the US economy to lose close to $1 billion daily and resulted in six months worth of backlogs.

 
US prepares for October Surprises.

Trade groups representing retailers, restaurants, and manufacturers are urging the administration to reverse its position, fearing severe economic impact. The International Monetary Fund warns of global trade fragmentation, making supply chains more vulnerable to disruptions. The situation is critical, with 25,000 workers prepared to strike, and negotiations between the union and US Maritime Alliance at a standstill. The White House has stated it will not prevent labor action at the ports. A strike would have long-term effects on the US economy, and its timing, just weeks prior to the November presidential elections, raises additional concerns.

Reference:

Lena Petrova (September 25, 2024) - Nearly 50% of ALL US Imports to Halt Due to Massive Port Strikes on October 1st. (video)