Brazilian steel giant Gerdau scrapped a planned US$600 million investment in a new steel plant in Mexico, citing uncertainty stemming from US tariffs. The plant, announced in the middle of 2024, was intended to produce 600,000 tons of steel annually.

Gerdau’s president, Gustavo Werneck, expressed concern over the future of automotive nearshoring in Mexico, noting that the US tariffs could significantly reshape the global auto supply chain. He said the company remains unsure whether Mexico continues to offer a stable platform for supplying auto parts to the US.

The company posted an adjusted net profit of US$134 million in the first quarter of 2025, down by 39% from the same period last year. The decline came despite higher sales, highlighting the negative impact of tariffs on its profitability.

The president indicated that Gerdau may consider shifting future investments away from Brazil toward international projects, though no decision has been made. Werneck pointed to Brazil’s weak trade defense measures as a key concern.