Brazilian producer, going through 50% US tariffs, appears to spend money on Mexico

Brazilian firm WEG, identified for manufacturing electrical motors, transformers and industrial tools, is accelerating its enlargement in Mexico in direct response to the brand new tariffs imposed by the US authorities on industrial merchandise originating in Brazil.

The U.S. hit the South American nation with a 50% tariff, one of many highest on the earth. This has led WEG to relocate a part of its manufacturing to Mexico, which maintains preferential entry to the North American market below the USMCA free commerce deal.

“We’ve been working to speed up capability investments in Mexico,” Chief Monetary Officer André Luís Rodrigues stated in an interview. “We don’t see this example lasting for a protracted interval, nevertheless it’s arduous to say when will probably be reversed.”

Rodrigues stated in July that the corporate had been diversifying its manufacturing geographically since earlier than Trump’s first time period, permitting it to reorganize its export routes. He defined that a part of its Mexican and Indian manufacturing would cowl demand within the U.S. market, whereas Brazil will serve different markets.

“We are able to reallocate our export losses. We are able to use Brazil to fulfill demand from Mexico and India and use manufacturing from these international locations to serve the American market. It’s an execution that may take a couple of months and, in spite of everything this alteration, we hope that we will mitigate most of those impacts,” he stated.

The Brazilian firm already has a plant in Atotonilco de Tula, Hidalgo. In January, it opened a brand new facility that spans 640,000 sq. meters, geared toward growing its manufacturing capability. This enlargement concerned an funding of over US $40 million.

WEG arrived in Mexico in 2000 as a part of its worldwide enlargement technique in Latin America. Over time, the corporate has expanded its presence with 5 manufacturing models: two in Huehuetoca (motors and transformers), one in Tizayuca (energy transformers), and two in Atotonilco de Tula, Hidalgo, devoted to electrical motors, industrial coatings and automation.

Up to now, the corporate has over 1.2 million sq. meters of floor space in Mexico, using round 4,000 workers.

With reviews from Solili, Somos Industria and Bloomberg