Samsung Electro-Mechanics Company, an electronic parts manufacturer belonging to South Korea’s Samsung Group, has abandoned plans to build an automotive components plant in Mexico in response to the US’ new foreign trade policies, according to local reports.

The company produces a wide range of electronic components globally, including high-voltage automotive MLCCs for EV battery management systems.

Samsung Electro-Mechanics had planned to build a plant in Mexico to produce automotive camera modules for US battery electric vehicle (BEV) manufacturer Tesla Inc and other automakers in the region. But these plans have now been shelved and a local subsidiary set up to manage the plant has been dissolved.

The Samsung Electronics Company affiliate had already established a subsidiary in the Mexican city of Querétaro in 2023 to build and manage the plant, which was to benefit from zero import duties under the US-Mexico-Canada Agreement (USMCA). The aim was to produce the modules close to its major North American customers, including Tesla.

The company has now cancelled the project, citing growing uncertainty over the future of the free trade deal. A source close to the company told reporters: “The decision to dissolve the Mexican subsidiary effectively means Samsung Electro-Mechanics is no longer pursuing the factory.”

US President Donald Trump is scheduled to hold trade negotiations with a significant number of major US trading partners this month, as he looks to reduce the country’s trade deficit, which has increased significantly over the last few decades. This includes Mexico, which faces US import tariffs of 25%.