SAO PAULO, Feb 20 (Reuters) - Brazilian steelmaker

Gerdau ( GGB ) may opt to bump up its output capacity in the

United States instead of building a new plant in Mexico, its CEO

said on Thursday, as tariffs implemented by President Donald

Trump shake up global trade.

Gerdau ( GGB ) announced last year it was considering installing a

new special steel mill in Mexico, which would have an annual

capacity of some 600,000 metric tons and require investment of

$500 million to $600 million.

Gerdau ( GGB ) initially expected to reach a final investment

decision by the end of 2024 to start building the plant this

year, but it has now postponed the decision until July.

"We are reviewing all our analyses in light of what is

happening," Chief Executive Gustavo Werneck told an earnings

call. "Special steel is a very important segment for us in the

Americas."

"We are looking at the possibility of building the mill in

two stages, or increasing production capacity in the United

States," Werneck said, citing the company's units in Michigan

and Arkansas.

U.S. President Trump earlier this month substantially raised

tariffs on steel and aluminum imports to a flat 25% "without

exceptions or exemptions," adding to other tariff threats

against major trading partners such as Mexico and Canada.

Gerdau ( GGB ) stands to benefit from the tariffs, as it operates

production units in the U.S., and had previously touted its

substantial footprint in the country as a hedge against the risk

of protectionism from Trump.

Werneck said the tariffs should lead to a better production

mix in the U.S. and higher profitability.

The firm is currently operating at 70% of its rolling

capacity in the U.S., or about 4 million tons per year.

Gerdau ( GGB ), Brazil's largest steelmaker by market

capitalization, on Wednesday posted a 9% decline in its

fourth-quarter adjusted net profit from a year earlier, landing

below market expectations.

The firm, which owns mills across the Americas, said that

starting from the first quarter of 2025 it would segment its

earnings out by regions - Brazil, North America and South

America.

"Gerdau North America should be a clear winner - at least in

the near-term - following the steel tariffs announced by

President Trump," analysts at Scotiabank said, although noting

the Brazilian unit could be negatively impacted.

Sao Paulo-traded shares in Gerdau ( GGB ) rose 0.7% on Thursday, in

line with the broader Bovespa stock index.