Mexico - Japan Trade 2023 Q4: Deficit Deepens

Key Market Takeaways: Mexico - Japan Trade

The bilateral trade relationship between Mexico and Japan reflects widening imbalances and volatile demand in Q4 2023.

• Deficit Deepens: Mexico’s trade gap hit $3.97B, with imports ($4.91B) dwarfing exports ($938.87M). Export declines (-12% to -19% YoY) outpaced import contractions.
• Resource-for-Tech Exchange: Mexico - Japan trade statistics show unspecified goods (34.9% of exports) swapped for electrical machinery (23.7% of imports), highlighting Japan’s high-value dominance.
• Asymmetric Interdependence: Japan holds strategic leverage as Mexico’s critical supplier of advanced tech, while Mexican exports lack diversification.

This bilateral trade snapshot is based on verified customs data from the yTrade database.

Mexico-Japan Trade Trend in Q4 2023

Mexico Export Performance: Shipments to Japan

• Total Volume: $938.87M in Q4 2023.
• Growth Trend & Context: YoY declines persisted across all months (-16.89% in Oct, -12.85% in Nov, -18.83% in Dec), signaling sustained demand weakness. No trade policy shifts were reported to explain the trend.
• Key Volatility: November saw the sharpest MoM drop (-11.97%), while December posted a minor recovery (+2.37%).

Mexico Import Performance: Sourcing from Japan

• Total Volume: $4.91B in Q4 2023.
• Growth Trend & Context: YoY growth in October (+26.84%) reversed sharply in November (-11.07%) and December (-10.55%), suggesting inventory drawdowns or softening industrial demand.
• Key Volatility: October’s 24.64% MoM surge was followed by a -20.06% contraction in November, reflecting volatile order patterns.

Mexico - Japan Trade Balance & Market Dynamics

• Net Position: Mexico ran a trade deficit of $3.97B (Imports $4.91B vs. Exports $938.87M).
• Relationship Status: Heavy reliance on Japanese imports, with exports failing to offset even a quarter of the import bill. The deficit widened YoY due to steeper export declines.

Mexico Import Trend from Japan 2023 Q4 (Source: yTrade)**

Mexico Export Trend to Japan 2023 Q4 (Source: yTrade)**

Get Historical Mexico Japan Trade Records

Mexico-Japan Top Trading Products in Q4 2023

Mexico Export Profile: What Does Mexico Sell to Japan

• Top Commodity: Rank #1 export is HS Code 99 (Unspecified goods) with a 34.88% share.
• Demand Driver: Japan likely imports these goods for industrial processing or niche market needs, given the unspecified nature of the category.
• Concentration: Trade is moderately concentrated, with the top 3 exports (HS 99, 87, 02) accounting for 72.1% of total exports to Japan.

Mexico Import Profile: What Does Mexico Buy from Japan

• Top Commodity: Rank #1 import is HS Code 85 (Electrical machinery) with a 23.72% share.
• Dependency Nature: Mexico relies on Japan for high-tech machinery, indicating a critical technology dependency in sectors like electronics and automation.

Mexico - Japan Trade Relationship Dynamics

• The Exchange Model: The trade shows Resource-for-Tech Complementarity. Mexico exports unspecified goods and agricultural products (HS 02, 08, 07) while importing high-value machinery (HS 85, 84) and vehicles (HS 87).
• Value Chain Position: Japan holds the higher value-add position, dominating exports of complex machinery and electronics, while Mexico’s exports are more commodity-driven or lower in complexity.

Import Analysis by Product: Japan to Mexico (Source: yTrade)

Export Analysis by Product: Mexico to Japan (Source: yTrade)

Check Detailed Mexico-Japan Trade HS Code Breakdown

Future Outlook & Strategic Recommendations

Forecast

The Mexico-Japan trade relationship is expected to face continued headwinds in the near term, with Mexico’s export decline likely to persist due to weak demand and lack of diversification. Japan’s softening industrial demand may further pressure Mexico’s imports of high-tech machinery, leading to volatile order patterns. However, the structural complementarity—Mexico’s commodity-driven exports and Japan’s tech dominance—offers a foundation for recovery if Mexico can upgrade its export mix. Without intervention, the trade deficit may widen further, underscoring the urgency for strategic adjustments.

Strategic Moves

• Diversify Export Basket: Mexican exporters must reduce reliance on unspecified goods (HS 99) by targeting Japan’s niche markets for processed agricultural products (HS 02, 07, 08) or automotive components (HS 87).
• Secure Long-term Tech Contracts: Importers should negotiate fixed-price agreements for critical machinery (HS 85, 84) to mitigate volatility from Japan’s inventory fluctuations.
• Leverage Nearshoring Opportunities: Mexican manufacturers must position themselves as alternative suppliers in Japan’s supply chains, particularly in electronics and auto parts, to offset declining exports.

Frequently Asked Questions

How did Mexico - Japan trade perform in 2023 Q4?

Mexico's exports to Japan totaled $938.87M, with YoY declines across all months, while imports from Japan reached $4.91B, showing mixed growth trends.

What are the top exports from Mexico to Japan?

The top exports include HS Code 99 (Unspecified goods, 34.88% share), HS 87 (vehicles), and HS 02 (agricultural products).

What does Mexico import from Japan?

Mexico primarily imports HS Code 85 (Electrical machinery, 23.72% share), along with high-tech machinery (HS 84) and vehicles (HS 87).

What is the trade balance between Mexico and Japan?

Mexico recorded a trade deficit of $3.97B with Japan in Q4 2023, with the gap widening due to steeper export declines.