President-elect Donald Trump might get livid with this piece of news. The Arkansas-based Walmart Stores (NYSE:WMT) have revealed that they are going to invest $1.3 billion in Mexico through their subsidiary, which is likely to create 10,000 jobs in the country. The jobs will be created over the next three years. These are all going to be permanent jobs.
The subsidiary firm is called Walmart de Mexico. It was also disclosed that the investment money will be raised from profits made in Mexico. Over the last four years, Walmart has invested a total of $2.6 billion in the country. The business presently has 2,300 stores in Mexico and other countries in Central America.
The company stores in Mexico are already attracting more than 4 million shoppers every day. The stores employ 200,000 people and have 28,000 suppliers.
Walmart’s Investment to Improve Infrastructure and Presence
Guilherme Loureiro, who is the Chief Executive of Walmart de Mexico said on Wednesday, “This investment affirms our confidence in Mexico, strengthening the logistical infrastructure to achieve our growth goals”. With this investment, the business will bolster their presence in the country, strengthen their logistics infrastructure, build new distribution points, and expand the existing ones.
The Mexican President, Pena Nieto, was naturally happy with this development. He was present during the signing ceremony on Wednesday night, and stated, “We are attracting larger investments in a world of huge uncertainty”. He added saying that this was a show of confidence of the private-sector in his country and its economy.
Loureiro agreed saying, “We are convinced that Mexico is a country rich in opportunities”. The CEO is right because Mexico is among the few economies in the region that are actually growing. The country has become an economic engine for the US.
How Will Donald Trump React?
Trump is yet to tweet after Walmart made this announcement. But there is speculation on how the President-elect is going to react.
Some Spanish media is seeing this move as a snub toward Trump, as he has said there will be a 35% tariff on American businesses that move jobs overseas, though presently the US trade laws does not allow this. A headline in the Spanish newspaper El Pais read “Walmart challenges Trump”.
But others have pointed out that Walmart (NYSE:WMT) isn’t moving jobs to Mexico from the US. Their subsidiary is creating jobs in the country.