The Trump administration offered two very different perspectives on the U.S.-Mexico trade relationship on Thursday.
President Trump, speaking to CEOs of American manufacturing companies, said America’s trade deals are “unbelievably bad.” His first example was Mexico.
“With Mexico we have $70 billion in deficit. … It’s unsustainable. … We’re not going to let it happen, can’t let it happen,” Trump said.
Later, John Kelly, Trump’s secretary of Homeland Security, praised the U.S.-Mexico trading relationship.
“This dynamic trade relationship has also helped create millions of jobs on both sides of the border,” Kelly said, during a visit with Mexico’s president, foreign minister and other leaders. “The relationship between the United States and Mexico is among, I believe, the most critical in the world.”
Kelly added that every day about $1.5 billion in trade crosses between the United States and Mexico.
Kelly is correct. According to several studies, millions of U.S. jobs are supported by trade with Mexico, as are millions of jobs in Mexico. Figures on the U.S. side vary between roughly 5 million and 6 million jobs.
Trump is also correct. The U.S. had a $63 billion trade deficit in goods with Mexico last year, according to the Census Bureau. However, that does not mean Mexico took $63 billion from America. Instead, it means that the U.S. bought more goods from Mexico last year than Mexico bought from America.
But Trump is right that the U.S. has lost some jobs to Mexico. Robert Scott, an economist at the Economic Policy Institute, estimates the U.S. lost roughly 800,000 jobs to Mexico between 1997 and 2013.
Trump blames NAFTA, the free trade deal with Canada and Mexico, for a flood of jobs to Mexico. However, a 2015 congressional nonpartisan study concluded that it was not responsible for an exodus of jobs to Mexico.
Correction: An earlier version of this story misstated the U.S. trade deficit. The $63 billion refers to the deficit in goods. The total goods and services deficit has not yet been published.
