Brazilian steel manufacturer Gerdau cancels US $600M investment in Mexico due to tariffs

Brazil’s largest steelmaker Gerdau announced connected Tuesday it had canceled US $600 cardinal successful concern successful Mexico, citing uncertainty pursuing the 25% tariffs imposed by U.S. President Donald Trump connected alloy and aluminum imports. 

The concern was earmarked for a caller 600,000-ton-per-year alloy works successful Mexico, according to a institution announcement made successful mid-2024. 

Gerdau is based successful Brazil, wherever its manufacturing, including alloy columns, faces contention from Chinese imports.
(www.gerdaucorsa.com.mx)

There is large uncertainty astir the aboriginal of automotive nearshoring successful Mexico, Gerdau’s president Gustavo Werneck said during a league telephone to contiguous first-quarter results.

There volition beryllium “a precise profound reconfiguration of the automotive level successful the coming years,” Weneck said. It is uncertain whether Mexico “will proceed to beryllium a coagulated level for car parts accumulation for the United States.”  

Werneck had antecedently announced that the steadfast was reviewing its concern plans successful Mexico, successful a league telephone with shareholders successful February.  

Gerdau generates astir fractional of its income successful the U.S. and Mexico astatine contiguous and the company’s nearshoring strategy was expected to assistance solidify its presumption successful the region. 

“It’s excessively aboriginal to cognize whether car parts volition halt being manufactured successful Mexico and instrumentality to manufacturing successful the U.S. oregon elsewhere,” Werneck told reporters connected Tuesday. “Our determination depends connected the uncertainty astir however the planetary automotive proviso concatenation volition beryllium reconfigured aft the tariffs.”

The institution reported an adjusted nett net of $134 cardinal successful the archetypal 4th of 2025, marking a 39% alteration connected the aforesaid play past year, contempt an summation successful sales, demonstrating the interaction of tariffs connected its revenues. 

Brazil’s alloy tariffs 

The CEO said it was imaginable that Gerdau whitethorn besides trim its concern successful Brazil successful favour of projects overseas successful the coming years, though the substance is inactive nether consideration. Werneck cited the deficiency of commercialized defence measures successful Brazil arsenic a challenge.

Last year, Brazil’s authorities imposed a 25% import tariff connected 11 alloy products, including rolled alloy and tubes, to support itself from Chinese competition. However, Brazilian steelmakers person demanded higher taxes connected a wider scope of products. 

“Is it worthy continuing to put successful Brazil, wherever we cannot get commercialized defence that allows america to vie connected a level playing field?” Werneck asked. “If the authorities doesn’t instrumentality action, this volition person a precise important interaction connected accelerating the country’s deindustrialization.”

Gerdau expects the authorities to denote measures successful May to artifact the travel of alloy to Brazil, peculiarly from China. 

With reports from Forbes México and Infobae