Mitsubishi Electric has placed a hold on plans to expand a parts factory in Mexico due to uncertainty about the North American Free Trade Agreement (NAFTA).
The Japanese company intended on signing off plans to expand its facility in Queretaro, Mexico last year, but opted against making any commitments when U.S. President Donald Trump initiated the renegotiation of NAFTA.
“Due to such NAFTA discussions, we are a bit hesitant to go ahead. So we are wait-and-see,” senior general manager of Mitsubishi Electric Tatsuya Ishikawa told Automotive News.
Despite putting its plans to expand its Mexican factory on hold, Ishikawa admitted that the parts supplier, whose biggest U.S. customers are General Motors, Ford, and Chrysler, is pondering the expansion of its current operations in the United States.
“It’s very difficult to predict. We need to be very careful. It’s a big investment. We don’t want to make any mistakes,” Ishikawa said of the uncertainty regarding NAFTA.
Last year, one of Trump’s key stipulations about a renegotiated trade agreement was the increase of the minimum percentage of parts that must be made in the U.S., Canada or Mexico to avoid tariffs from 62.5 per cent to 85 per cent.
