Canadian apparel giant Gildan Active Wear is moving out of Mexico, where the firm employs about 1,700 employees. It will transfer equipment to its cheaper, existing production hubs in Central America and the Caribbean. At the same time, it’s building many production complexes in Bangladesh to serve European and Chinese customers. The company is looking at its future cost structure, and believes they can achieve a much lower cost by limiting the facilities.

The will hit Mexico adversely, which has experienced its complex status as a manufacturer eroded by a range of threats from President Trump, who renegotiated NAFTA with a deal that’s yet to be ratified by Congress. However, Mexico has made an effort to target more sophisticated operations in recent years, becoming a major spot for the auto industry and attracting some aviation investment.

Montreal-based Gildan has built a global production chain ranging from yarn-spinning to clothes-stitching that has allowed the company to lower costs and compete with Hanesbrands Inc. and Berkshire Hathaway Inc.’s Fruit of the Loom. It’s heavily invested in Honduras, while its two Mexican facilities came with its 2016 acquisition of Alstyle, a company that, like Gildan, sold T-shirts and fleece to screen printers that customize them for clients. Mexico accounts for 8 to 9 per cent of Gildan’s global production.