ICTSI says tariffs pose big hit on Mexico port

INQUIRER FILE PHOTO

MANILA, Philippines — International Container Terminal Services Inc. (ICTSI) said its operations in Mexico could potentially take a big hit from American “reciprocal tariffs.”

Still, the homegrown global port operator is in wait-and-see mode on the possible fallout of US President Donald Trump’s vacillating trade policy.

“The only major impact that could be possible or potential would be our Manzanillo terminal in Mexico,” ICTSI president and chair Enrique Razon Jr. said during a virtual stockholders’ meeting on Thursday.

“It is too early to tell the effect of the Trump tariffs since President Trump seems to be flip-flopping everyday on this and creating chaos throughout the global economy,” Razon added.

In Mexico, ICTSI operates Contecon Manzanillo, which had an estimated market share of 37 percent last year. The port operator handles eight terminals across the Americas.

First targets

After Trump was sworn in last January, he announced a 25-percent tariff on all imports from Mexico and Canada. He backpedaled later on. Still, car shipments to the US from Mexico are subject to a separate 25-percent tariff.

Razon, meanwhile, said that the US accounts for only 3 percent of ICTSI’s total cargo volume.

The group handled a total of 13.07 million twenty-foot equivalent units (TEUs) of cargo last year. This was an increase of 2 percent from 12.75 million TEUs in 2023.

With China exports to the United States hampered, Razon said the Asian manufacturing superpower could potentially look at other markets. He said this might benefit ICTSI.

“Our operations are very diverse,” Razon said.

READ: ICTSI profit jumps 66% on improved global trade in 2024

ICTSI is present in 19 countries across three regions. Asia accounts for the bulk of its port revenues.

This year, ICTSI will spend $580 million to expand seaport facilities here and abroad.

In particular, the budget will fund projects in Batangas, Manila and Cagayan de Oro. The outlay will also support projects in Mexico, Democratic Republic of the Congo and Brazil.

The company has earmarked $100 million to upgrade the terminal capacity of Mindanao International Container Terminal Services Inc.

Last year, it was granted another 25 years of concession period, or until 2058, to operate the Misamis Oriental port.