ABB Increases US Investments to Navigate Tariffs and Spur Growth
Amidst the anticipated tariff hikes from the new Trump administration, ABB is bolstering its investments in the United States to mitigate potential impacts and capitalize on the country's economic expansion.
"We're allocating additional investments to address the situation," stated Timo Ihamuotila, ABB's Chief Financial Officer (CFO), in an interview during the World Economic Forum (WEF) in Davos, Switzerland. "The US market offers strong growth prospects, making it a strategic move regardless of trade dynamics."
During his campaign, President Trump pledged to impose tariffs ranging from 10% to 60% on global imports, including 60% on Chinese goods, to address the substantial US trade deficit.
To navigate these challenges, Ihamuotila emphasized the importance of local production for local customers. ABB currently produces approximately 80% of its products in the US, its largest market.
"We operate 30 manufacturing facilities in the US and intend to further expand and potentially establish new ones," Ihamuotila said.
In addition to factory investments, ABB will also consider US-based acquisitions, despite the elevated valuations of potential targets.
Outside the US, Europe accounts for approximately 90% of local production for ABB products sold within the region, while China has achieved 85% local production.
"While not entirely impervious, these measures significantly mitigate tariff impacts," Ihamuotila explained. "ABB advocates for free trade and prefers zero tariffs, but we navigate the realities as they unfold."