SAO PAULO (Reuters) -Brazilian motor maker WEG said on Thursday it expects to offset most of the impact from the 50% tariff U.S. President Donald Trump said he would impose on Brazilian goods partly by adjusting some export routes.
Analysts have cited WEG – whose motors are used in vehicles, wind turbines and power transmission lines – among the most exposed firms to the steep tariffs, which are due to take effect on August 1.
The company on Wednesday reported lower-than-expected second-quarter results, noting that geopolitical uncertainties have limited long-term visibility and led some clients to postpone investment decisions for large projects.
Chief Financial Officer Andre Rodrigues suggested on Thursday the firm could use its Brazilian operations to supply countries such as Mexico and India, whose products would in turn meet U.S. demand.
“The execution may take a few months, but once the change is implemented, we expect to be able to mitigate most of these impacts,” he told a call with analysts, though warning the move would also depend on the levies Trump imposes on other nations.
WEG has plants in over a dozen countries, including the United States and Mexico, and has touted its global presence and broad product portfolio as factors that might help shield it from the tariffs’ impacts.
Rodrigues said that products made in Brazil currently account for less than a third of WEG’s U.S. sales.
He noted that the effects on WEG’s second-quarter results of the 10% tariff Trump had initially imposed in April were small, saying that the firm made some price adjustments in the U.S. to offset the impact of those levies.
“Looking ahead, at this point it’s not possible to have a firm stance, given the many uncertainties and volatility in the trade structures being discussed,” Rodrigues added. “But if the current situation persists, WEG does have an action plan.”
(Reporting by Gabriel Araujo in Sao Paulo and Michael Susin in Barcelona; Editing by Natalia Siniawski and Brendan O’Boyle)
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