The fiscal package approved this Wednesday in the United States will boost Mexican exports, as well as remittances to Mexico, highlighted the Washington Office of the Business Coordinating Council ().
Likewise, the package was approved along partisan lines in both houses.
The core element is direct support to American consumers:
- $ 1 trillion in consumer subsidies (checks, child tax credits, and unemployment compensation).
- 750,000 million dollars for the vaccination campaign and support to state and local governments.
For example, families with two children earning <$ 150,000 per year will receive a check (one time) for $ 5,600 (1,400 per person).
The supplement of an additional $ 300 per week for unemployment insurance also extends through September.
The package equates to 9% of America’s GDP (higher than Canada’s GDP) and adds to nearly $ 4 trillion of fiscal stimulus from last year.
Economists at JPMorgan estimated that, in 2020, the US stimulus added 3.5% to Mexico’s GDP.
This package could benefit Mexico through demand for Mexican exports and the sending of more remittances to Mexico.
The Mexican Council for Foreign Trade (Comce) also agrees that the stimulus package will boost Mexican exports in 2021, with an increase of between 8 and 9% year-on-year, according to its estimates.
According to the National Council of the Maquiladora and Export Manufacturing Industry (Index), many American families increased purchases of durable goods with the resources obtained from the previous stimulus package, which benefited Mexican exports.
The House of Representatives on Wednesday approved a $ 1.9 trillion aid package for the US economy, marking President Joe Biden’s first legislative achievement.
The bill passed with zero Republican votes.
While Democrats argued that the stimulus package seeks to reactivate the economy, Republicans criticized the bulk of spending at a higher level than it should be during the pandemic.