Staff commute to work at Kia’s plant in Pesqueria, Nuevo Leon, Mexico, March 6. Yonhap
Korean firms with manufacturing bases in Mexico, together with round 100 native accomplice corporations, are struggling to cope with enterprise uncertainties stemming from the unpredictability of U.S. President Donald Trump’s tariff coverage on the neighboring nation, business officers mentioned Thursday.
Earlier within the day, Trump signed govt actions to delay 25 p.c tariffs on Mexican and Canadian items coated below the U.S.-Mexico-Canada Settlement (USMCA) till early subsequent month. The reprieve got here after a earlier monthlong pause.
Korea’s bilateral commerce with Canada and Mexico was tallied at $19.8 billion in 2023. In accordance with company information agency Korea CXO Institute, 25 Korean conglomerates had operated 110 subsidiaries in Mexico as of 2024.
Kia’s Mexican plant in Pesqueria, Nuevo Leon, marks its tenth anniversary this 12 months. Constructed on a 4.99 million-square-meter web site, the plant has turn into one of many main industrial gamers on this metropolis situated on the outskirts of Monterrey, the second-largest metropolis in Mexico.
The native provider ecosystem across the plant is in depth, with round 100 companions within the area, based on estimates from the Korea Commerce-Funding Promotion Company, often known as KOTRA.
Native business officers mentioned a way of unease has been rising all through Pesqueria just lately.
„As anybody can guess, there is just one purpose. It’s due to U.S. President Donald Trump’s tariff insurance policies,“ a Kia official mentioned.
Final 12 months, Kia produced round 270,000 autos on the Pesqueria plant, of which over 60 p.c have been exported to the U.S.
Trade observers right here say the concern of U.S. tariffs inside the neighborhood has intensified because of the unpredictable nature of Trump’s commerce insurance policies.
„It seems like tariff insurance policies are consistently altering, from yesterday afternoon to this morning and once more this afternoon,“ an official at a Kia components provider mentioned, requesting anonymity.
A consultant from an auto components firm, who additionally requested anonymity, echoed the sentiment.
„In fact, a tariff delay is healthier than an precise imposition, however at this level, some are even saying, self-deprecatingly, that it could be much less disturbing to simply have the tariffs imposed on the introduced date,“ the particular person mentioned.
Kia’s Mexican plant in Pesqueria, Nuevo Leon, Mexico is seen this March 6 photograph. Yonhap
The particular person added, „We’re experiencing firsthand that the worst factor in enterprise administration is uncertainty.“
Kia is actively engaged on diversifying its gross sales channels to mitigate harm from potential disruptions in its U.S. exports if and when tariff impositions are realized.
„We’ll proceed efforts to develop supplier networks inside Mexico whereas diversifying export locations, together with Europe,“ the Kia official mentioned.
Moreover, the Kia official harassed the corporate is dedicated to making sure that its 2,500 staff work in a protected atmosphere whereas additionally taking part in a component in fostering mutual progress with accomplice firms.
Samsung Electronics and LG Electronics, which additionally function crops in Mexico, together with their native suppliers, are reviewing response methods to potential U.S. tariffs.
Some firms are reportedly eyeing the second half of 2026, throughout which the U.S. midterm elections are set to be held, as a time window for a choice on whether or not to relocate their Mexican manufacturing bases to keep away from damaging impacts from Trump’s tariffs.
Others are reportedly contemplating the timeline for the evaluate and adjustment of the USMCA implementation necessities, that are set to be reassessed by subsequent 12 months.
Some observers, nevertheless, observe that relocating manufacturing bases out of Mexico might find yourself being an ill-advised transfer in the long term.
„Relying on developments within the U.S., Mexico might find yourself changing into an much more strategic location for Korean firms sooner or later,“ mentioned Um Ki-woong, managing lawyer at Mundus Apertus, the biggest Korean regulation agency in Mexico. „In the event that they depart Mexico now, returning later will come at considerably greater prices.“ (Yonhap)
