Identify Cause and Effect: What do you think might happen to Mexico's economy if exports to the United States dropped substantially?

Question

Social Studies

Russell Sloan

6 April, 04:16

Identify Cause and Effect: What do you think might happen to Mexico's economy if exports to the United States dropped substantially?

+4

Answers (1)

Know the Answer?

Olivia Palmer · Answer 1

Mexico's economy will suffer badly.

Explanation:

Mexico is a developing country. It is a neighbor of the largest and most powerful economy in the world, the United States. Because the United States are such massive economy they consume a lot, meaning that they import lot of goods. On top of it, lot of corporations from the United States have set their facilities in Mexico because of the cheaper labor force.

Mexico exports the majority of its goods to the United States, and having thousands of factories on its soil as well makes it highly dependent on the trade and collaboration with their northern neighbors. If from some reason the trade between the two stops the economic consequences fro Mexico will be catastrophic. The country will end up with its by far biggest exporting market, so most of its goods will be a surplus that will not be sold. Also, the US companies will close their facilities, so millions of people will be left without their jobs which will cause large scale poverty.