China's JAC Motors and a Mexican firm are teaming up to invest $212 million in a plant to produce sport-utility vehicles in central Mexico, officials said Wednesday amid trade tensions with the United States.

The deal will expand the capacity of a plant owned by the Mexican company, Giant Motors Latinoamerica, in Ciudad Sahagun, central Hidalgo state.

Giant Motors director Elias Massri said production is expected to begin on March 28, with 1,000 vehicles in the first year and the goal of making 10,000 units per year by 2021.

The factory, which already produces trucks for China's FAW brand, will make two JAC SUV models.

The SUVs will be sold in Mexico, Central America and South America.

The announcement comes as US President Donald Trump has threatened to impose stiff export tariffs on companies that ship jobs to Mexico.

"When you can't look only to the north, you can look to the east," Hidalgo's governor, Omar Fayad, said at a news conference in Mexico City.

US auto giant Ford decided last month to cancel plans for a $1.6 billion factory in the northern state of San Luis Potosi, though the company denied it was due to Trump's threats.

Trump has also lashed out against General Motors and Toyota.

Mexico is the world's fourth biggest car exporter.