Brazilian manufacturer, facing 50% US tariffs, looks to invest in Mexico

Brazilian institution WEG, known for manufacturing electrical motors, transformers and concern equipment, is accelerating its enlargement successful Mexico successful nonstop effect to the caller tariffs imposed by the United States authorities connected concern products originating successful Brazil.

The U.S. deed the South American state with a 50% tariff, 1 of the highest successful the world. This has led WEG to relocate portion of its accumulation to Mexico, which maintains preferential entree to the North American marketplace nether the USMCA escaped commercialized deal.

WEG’s Mexico factories nutrient motors, transformers and concern coatings, among different products. (Simon Kadula / Unsplash)

“We’ve been moving to accelerate capableness investments successful Mexico,” Chief Financial Officer André Luís Rodrigues said successful an interview. “We don’t spot this concern lasting for a agelong period, but it’s hard to accidental erstwhile it volition beryllium reversed.”

Rodrigues said successful July that the institution had been diversifying its accumulation geographically since earlier Trump’s archetypal term, allowing it to reorganize its export routes. He explained that portion of its Mexican and Indian accumulation would screen request successful the U.S. market, portion Brazil volition service different markets.

“We tin reallocate our export losses. We tin usage Brazil to conscionable request from Mexico and India and usage accumulation from these countries to service the American market. It is an execution that tin instrumentality a fewer months and, aft each this change, we anticipation that we tin mitigate astir of these impacts,” helium said.

The Brazilian institution already has a works successful Atotonilco de Tula, Hidalgo. In January, it opened a caller installation that spans 640,000 quadrate meters, aimed astatine expanding its accumulation capacity. This enlargement progressive an concern of implicit US $40 million.

WEG arrived successful Mexico successful 2000 arsenic portion of its planetary enlargement strategy successful Latin America. Over the years, the institution has expanded its beingness with 5 manufacturing units: 2 successful Huehuetoca (motors and transformers), 1 successful Tizayuca (power transformers), and 2 successful Atotonilco de Tula, Hidalgo, dedicated to electrical motors, concern coatings and automation.

To date, the institution has implicit 1.2 cardinal quadrate meters of aboveground country successful Mexico, employing astir 4,000 employees.

With reports from Solili, Somos Industria and Bloomberg