Trump’s NAFTA bashing has BRP on edge

Investors do not seem too concerned with the potential NAFTA situation as they pushed BRP’s stock up almost 10%.

BRP's newly opened Juarez manufacturing facility.

BRP's newly opened Juarez manufacturing facility. — Photo: Yucatan Times/BRP

Both national newspapers, The Globe and Mail and National Post are reporting that BRP CEO Jose Boisjoli is expressing concern and caution in light of President-elect Trump’s opposition to the North American Free Trade Agreement (NAFTA).

Trump is on record of frequently calling NAFTA, “the worst trade deal maybe ever signed anywhere.”

BRP, based in Valcourt, Quebec, has three manufacturing plants in Mexico, including a brand new facility which opened in Juarez, early in the spring of 2016.

“Obviously, I think the big, dark cloud above our heads is everything related to NAFTA,” said Boisjoli, at a press conference last week.

According to the newspaper reports, BRP has just over $1 billion in trading volume between Mexico and the U.S. If “most favoured trading nation” status was lost it would mean that BRP's Mexican-produced products could be tagged with an additional tax of 1.5 to 3%.

“Being in Mexico with access to a skilled labour force, obviously there’s a cost advantage there, but also having access to the supply base in Mexico is very beneficial to us,” CEO Boisjoli added in the interview.
BRP manufactures their PWC line of Sea-Doos and Can-Am ATV’s in Mexico. Their lineup of Ski-Doo snowmobiles are manufactured in Valcourt, Quebec.

Investors do not seem too concerned with the potential NAFTA situation as they pushed BRP’s stock up almost 10% to $28.21 per share late last week.

BRP and much of the rest of the Canadian economy continues to watch with interest to see if President Trump will actually rip up the NAFTA agreement, one of the biggest trade deals in the world.

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