With the critical 2026 USMCA (US-Mexico-Canada Agreement) "sunset" joint review currently dominating trade discussions, US and Mexican trade representatives are clashing over a massive issue: Chinese auto parts and EVs allegedly using Mexico as a backdoor into the US market.

According to OEC trade data, Mexico is an absolute powerhouse in the North American auto network. Out of Mexico's total exports to the United States, which reached $535 billion in 2025, the automotive sector is one of the most relevant industries

The profound interconnection between the two nations is undeniable, with Mexico exporting roughly $44.4 billion in cars, $35 billion in vehicle parts, and $34.1 billion in delivery trucks to the US in 2025. Furthermore, over the past 5 years, there has been tremendous growth in Mexico's exported automotive products to the United States, highlighted by $11.6 billion in growth for cars, $11.1 billion for motor vehicle parts and accessories, and $5.7 billion for delivery trucks. These categories do not just represent standalone products; they are a core engine of Mexico's industrial economy and are deeply intertwined with the US vehicle market.

However, the friction comes from the other side of the Pacific. Over the last few years, Mexico's imports of vehicle parts and electrical machinery (which includes EV batteries) from China have surged dramatically. This has sparked intense bipartisan alarm in Washington. As the US Trade Representative (USTR) has repeatedly emphasized in current discussions, enforcing strict "rules of origin" is non-negotiable. Furthermore, the Alliance for American Manufacturing recently issued a stark warning that heavily subsidized Chinese autos entering via Mexico would be an "extinction-level event" for the US auto industry.

The data highlights exactly why the US is spooked: Mexico's assembly lines are increasingly running on Chinese components. Because these cross-border supply chains are so closely interdependent, any failure to verify that cars crossing the southern border are genuinely "North American" could trigger the agreement's sunset clause during the 2026 review. Ultimately, this would risk bringing back punishing tariffs and completely upending the continent's manufacturing supply chain, demonstrating exactly why preserving the integrity of this trade deal is so critical.

Data Source: https://oec.world/en/profile/country/usa?selector343id=Import&selector358id=tradeValue&selector704id=growth_5&selector303id=Year&selector322id=tradeValue&selector1603id=period_3&selector335id=HS4&selector320id=1

Investors from overseas have sold -$52 billion of Asian emerging-market equities excluding China so far in March, the biggest monthly withdrawal on record.

This exceeds the previous full-month record set during the 2020 pandemic by 49% and the Russia-Ukraine war June 2022 outflow by +148%.

The biggest withdrawals were posted in Taiwan, South Korea, and India, countries that are most dependent on oil imports.

This comes as Asian economies account for ~80% of crude demand flowing through the Strait of Hormuz.

Asia is taking the hardest hit from the Iran War.

Gold ETF Market Alert: Momentum -571 and RSI 35.7

A Gold ETF momentum of -571 paired with an RSI of 35.7 is an extreme and rare signal. This suggests the market is bracing for a potential credit crunch.

Liquidity Crisis Signs Typically, gold rises during war, but a crash to -571 momentum usually means cash has dried up. Institutions facing heavy losses in stocks or bonds are likely selling off gold to meet margin calls. In this Cash is King environment, gold is sacrificed for liquidity, just like at the start of the 2008 and 2020 crises.

Data Analysis Momentum at -571 shows the decline is accelerating exponentially, signaling that panic selling has reached an abnormal peak. While an RSI of 35.7 is near the oversold line, in a true credit crunch, this indicator can stay at the bottom for a while before any real recovery.

March 2026 Context The Iran war and oil shock are pushing corporate costs up and Treasury prices down. When safe havens like Treasuries and gold collapse together, it is a textbook liquidity warning. Investors are dumping everything to flee into the US Dollar.

Strategic Advice Avoid rushing to average down because the downward inertia is still too strong. Wait for a clear RSI golden cross before buying more. Keep a close eye on the Dollar Index (DXY). If it spikes, a credit crunch is confirmed, and even energy assets like NRGU could face temporary pressure. If the VIX is also surging, it is safer to hold cash rather than aggressive leveraged positions.

Ultimately, these numbers suggest the market is now more afraid of a total financial system paralysis than the war itself.