May 31, 2019 / 11:25 AM / 6 months ago

Swedish auto supplier SKF to pass on impact of U.S. Mexico tariffs

STOCKHOLM, May 31 (Reuters) - Sweden’s SKF said it would pass on the impact from U.S. tariffs on its industrial seals and bearings produced in Mexico to customers after U.S. President Donald Trump threatened to slap tariffs on imports from its southern neighbour.

SKF’s Mexico investment is mainly targets manufacturers in North America. Its major customers include carmakers General Motors, FCA, Ford, Volkswagen , Nissan, Mazda.

“We have been quite successful to date in passing import tariffs on to customers. There can sometimes be a short lag in the compensation but, on the whole, we have passed them on,” a SKF spokesman told Reuters.

“At this stage, we would aim to do the same with these tariffs,” he said in an email when asked how SKF intended to deal with latest U.S. initiative.

Makers of machines that rely on thousands of small parts from around the world and the escalating trade war from United States and China has increased prices of crucial raw materials such as steel and tariffs on other components.

Trump said on Thursday he would hit goods coming from Mexico with a 5% tariff and would hike that levy each month until it hits 25% on Oct. 1, unless Mexico took immediate action against illegal immigration across the U.S. border.

Gothenburg-based SKF, which has had a presence in Mexico since 1920, employees 1,500 people and operates five factories, with three manufacturing seals and bearings for automotive customers and the rest for industrial clients.

Besides selling to customers in North America, SKF also sells its products in Mexico to customers in the mining, steel, metalworking, petroleum, pulp and paper and food industries. (Reporting by Esha Vaish in Stockholm)

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