May 5 (Reuters) - Rivian said on Monday that it

will invest $120 million to bring its key parts suppliers near

its plant in Illinois, as the electric vehicle-maker seeks to

lower the impact of U.S. President Donald Trump's tariffs on

Mexico and Canada.

The supplier park near Rivian's facility at Normal, Illinois

will also reduce shipping, logistics and warehousing costs,

while adding hundreds of jobs in the next two years, including

about 100 directly by the company, it said.

"This will be a key enabler to increasing production at the

plant in 2026 when we start to build R2 in addition to R1 and

our commercial vans," CEO RJ Scaringe said in a blog.

Rivian builds all its electric vehicles at the Normal plant,

including its flagship R1S SUVs and R1T pickup trucks. The

production of its less expensive R2 is expected to begin next

year.

The company in April reported a 36% decline in first-quarter

deliveries. CFO Claire McDonough had said in February that

vehicle deliveries would be lower this year due to soft demand,

partially because of the impact of fires in Los Angeles.

Demand could be further pressured as U.S. President Donald

Trump's tariff policies are expected to accelerate inflation and

increase prices of automobiles, making consumers wary of

committing to big purchases.

Last week, Trump signed a pair of orders to soften the blow

of his auto tariffs, with a mix of credits and relief from other

levies on materials.