DAVOS, Switzerland (Reuters) - ABB is increasing its investments in the United States as a way to deal with tariff hikes expected from the new Trump administration and to benefit from the country's economic growth, Chief Financial Officer Timo Ihamuotila said on Tuesday.

"We will be investing more to compensate for this," Ihamuotila told Reuters when asked about the impact of higher import duties.

"We will be investing more because it's a good growth market," the CFO said in an interview on the sidelines of the World Economic Forum (WEF) annual meeting in Davos, Switzerland.

During his election campaign, new U.S. President Donald Trump vowed to impose steep tariffs of 10% to 20% on global imports into the U.S. and 60% on goods from China to help reduce a U.S. trade deficit that now tops $1 trillion annually.

Ihamuotila said local production for local customers was the best way to deal with the situation, noting that ABB currently produces around 80% of its products completely in the U.S., the engineering company's biggest market.

"We have about 30 manufacturing locations in the U.S. and we will continue to expand these and probably even add something," Ihamuotila said.

As well as spending more on its factories and facilities, ABB would also consider U.S.-based acquisitions, although many potential targets had high valuations at present, he said.

Outside the United States, Ihamuotila said about 90% of ABB's products sold in Europe are produced there, while China has about 85% local production.

"It doesn't fully insulate you, but it helps a lot," Ihamuotila said. "In general, we are for free trade; we would like to see no tariffs, but it is what it is."