The exchange rate between the Chinese yuan and the US dollar affects Mexican manufacturing exports to the US. A lower yuan-dollar rate reduces Mexican exports by making Chinese goods cheaper in the US. A weaker peso-dollar rate also lowers Mexican exports due to high import content. External demand and labor productivity boost exports, while real wages have a negative impact. To counteract these effects, Mexico needs to invest more in education and training for higher labor productivity growth and reduce reliance on foreign suppliers.