Stimulus package in the US will boost exports from Mexico

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The stimulus package proposed by President Joe Biden in the United States will boost Mexican exports in 2021, with an increase of between 8 and 9% year-on-year, estimated the Mexican Council for Foreign Trade (Comce).

The stimulus package proposed by President Joe Biden in the United States will boost Mexican exports in 2021, with an increase of between 8 and 9% year-on-year, estimated the Mexican Council for Foreign Trade ( Comce ).

Already the stimulus package, of 1.9 billion dollars, was approved last weekend by the Senate and the House of Representatives, where the Democratic legislators are the majority, is expected to ratify it this Wednesday.

Among other benefits, the package includes checks for $ 1,400 for most Americans ($ 2,800 for most married couples).

According to the National Council of the Maquiladora and Export Manufacturing Industry ( Index ), many American families increased purchases of durable goods with the resources they obtained from the previous stimulus package, such as televisions, refrigerators and computers, merchandise in which Mexico is competitive.

Fernando Ruiz Huarte , CEO of Comce , stressed that Biden’s stimulus package would provide greater liquidity that would be reflected in higher exports from Mexico.

According to its projections, Mexican foreign sales will increase between 8 and 9% in 2021, after decreasing 9.3% last year, to 417.67 billion dollars, its biggest drop in the last 11 years.

For now, Mexican exports began the new year against the tide, registering a year-on-year decline of 2.6% in January, to total 32,704.2 million dollars.

Once ratification is confirmed in the House of Representatives, the US Congress will have voted on a third round of direct payments to address the continuing economic consequences of the Covid-19 pandemic .

A first round was included in the CARES Law and a second round was introduced in the Consolidated Allocations Law of 2021.

The new stimulus package would be incorporated into Title IX, Subtitle G of the American Rescue Plan Act of 2021, passed by the Senate on March 6, 2021.

Biden’s initiative suggests that households would generally receive a one-time payment based on income and household size.

Specifically, the payment would equal $ 1,400 per eligible individual, plus an additional 1,400 for each dependent, as defined for tax purposes. The definition of dependent would include older children and dependent adults.

Households reporting income less than $ 75,000 for single, $ 112,500 for single with dependents, or $ 150,000 for most married couples would generally be eligible for the maximum payment amount.

In most cases, for the purposes of these payments, a household would consist of all the people listed on an income tax return.

Ruiz Huarte said that the projected growth of exports would represent an engine for the Mexican economy, since it would be equivalent to a rise that is around twice the expected growth rate of Mexico’s GDP .

But he also opined that the country needs to increase its productive investments, a crucial aspect to expand the export base.

One more aspect to consider is China. In its first statements, the Joe Biden Administration has indicated continuity with the Donald Trump Administration in its characterization of the challenge that China poses to the interests of the United States.

Biden has referred to China as “our most serious competitor,” declared that China is challenging “our prosperity, security and democratic values,” and called on allies and partners to “prepare together for long-term strategic competition with China. ”.

Source: eleconomista.com.mx

Mexico Daily Post