(Bloomberg) -- U.S. President Donald Trump's vow to impose tariffs on goods from Mexico is taking a toll on TPI Composites Inc., one of the largest U.S. makers of wind turbine blades.
TPI operates several factories in Mexico, accounting for 26% of the company's 2018 sales. They could take a hit if Trump follows through on his threat to impose 5% duties on Mexican imports on June 10, rising in increments to 25% in October unless Mexico halts “illegal migrants.” Shares of Scottsdale, Arizona-based TPI sank as much as 9% Friday to $19.54, the lowest intraday since March of last year.
Imposing a 25% tariff on blades coming into the U.S. would increase overall costs for customers by about 5%, TPI President William Siwek said in an email.
“We believe the U.S. Administration has given Mexico a pretty specific request to avoid the tariffs,” Siwek said. “It would make sense for Mexico to act with urgency.”
The tariff threat is TPI's latest woe. A strike earlier this year at the company's fiberglass blade plant in Matamoros, Mexico, hobbled production. The company expects to deliver only about 60% of its planned output from the facility, executives said on a call with analysts this month. The slowdown comes just as demand for blades in the U.S. is expected to surge before a federal tax credit expires.
To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Joe Ryan
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