Samsung Electro-Mechanics has abandoned its Mexico manufacturing plans, becoming one of the first major Asian corporate casualties of Donald Trump’s escalating trade war.
The South Korean electronics component maker dissolved its Mexican subsidiary after investing 4.9 billion won ($3.6 million) in the venture, according to people familiar with the matter. The company established the unit in Querétaro in late 2023 to produce automotive camera modules for Tesla and other automakers, capitalizing on zero-tariff benefits under the US-Mexico-Canada Agreement.
Trump’s threat to renegotiate USMCA and impose reciprocal tariffs has spooked companies that viewed Mexico as a gateway to American markets. The administration’s renewed calls to revise the trilateral deal threaten to unravel years of planning by multinationals that treated Mexico as a low-cost manufacturing hub.
The collapse in North American electric vehicle demand growth — dubbed the “EV chasm” — also influenced Samsung’s decision. Trump’s elimination of federal EV subsidies through his One Big Beautiful Bill Act further undermines the business case for expanding automotive parts capacity in the region.
Samsung Electro-Mechanics, a key Tesla camera module supplier, is now exploring alternative locations in Southeast Asia. The retreat underscores how Trump’s protectionist agenda is reshaping global manufacturing strategies, forcing companies to recalculate decades-old supply chain assumptions.
