2 weeks Ago By Korea Bizwire
Kia Mexico Plant Overview (Captured from Kia Mexico Corporation’s Official Website) MEXICO CITY, Feb. 4 (Korea Bizwire) — South Korean companies operating in Mexico have expressed cautious relief after the U.S.
and Mexican governments agreed to postpone a planned 25% tariff on Mexican exports for one month. However, with the tariff still looming as a possibility, businesses remain on high alert, preparing for potential disruptions. Kia Mexico, a key player in the country’s competitive automobile manufacturing sector, maintained a measured stance following the announcement, stating that it is ready to adapt swiftly to changing circumstances.
The company, which operates a factory in Nuevo León near the U.S. border, produced approximately 270,000 vehicles in 2024, with 62% exported to the U.
S. Kia is now exploring diversification strategies to mitigate the risks posed by potential trade restrictions. “It is too early to assume the tariffs will not be implemented,” a Kia Mexico representative told Yonhap News Agency .
“We are preparing measures to minimize customs and tariff risks while closely monitoring negotiations between the U.S. and Mexico over the next month.
” The sentiment is shared across the 400 South Korean businesses operating in Mexico, particularly those engaged in direct or indirect trade with the U.S., according to estimates from the Export-Import Bank of Korea and the Korea Trade-Investment Promotion Agency.
A key supplier to Samsung Electronics Mexico (SAMEX) voiced concerns that expecting the U.S. to fully withdraw the tariff threat would be premature.
“The situation is fluid and depends on Mexico’s commitment to controlling fentanyl trafficking and immigration flows,” the supplier stated, noting that political dynamics could shift quickly. Shinhan Bank Mexico, which first entered the market in 2008 and expanded its presence in industrial hub Monterrey, also emphasized the need for a cautious approach. “For now, businesses are closely monitoring negotiations and avoiding hasty decisions,” a bank official said.
Some industry insiders speculate that former President Donald Trump, should he return to office, may repeatedly extend tariff delays to maximize leverage in negotiations. There are even concerns that this “weaponization of tariffs” could persist until at least 2026, coinciding with the scheduled review of the United States-Mexico-Canada Agreement (USMCA). A representative from an electronics component manufacturer in Reynosa drew parallels to Trump’s first term, when similar tactics were used during USMCA negotiations.
“Back then, industries adjusted their strategies to navigate the uncertainty,” the source said. “We anticipate that companies will once again brace for a prolonged period of trade instability, minimizing potential losses wherever possible.” While the immediate tariff threat has been deferred, South Korean businesses in Mexico remain vigilant, preparing for a prolonged period of policy unpredictability in the U.
S.-Mexico trade landscape. Ashley Song (ashley@koreabizwire.
com).
