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Manufacturing · Equity
Ford Motor rejects Trump’s plan to move production from China to U.S., blames the lack of market
CKN
2018/09/11 09:00:48
1,011

Sep 11, 2018 (China Knowledge) - Ford Motor Company (NYSE: F) has cancelled its plan to import its vehicle Focus Active crossover into the U.S. from China following tariffs put in place by President Trump on cars which are assembled in China.

These tariffs place a 25% levy on China-built vehicles which prevents the Focus Active from being profitable in its competitive segment. Ford had moved its production of the crossover model to China in a bid to increase its profitability with plans to import the Focus crossover into the U.S.

Trump’s statement that Ford being unable to import the Focus crossover means that Ford can now build it in the U.S. has drawn rebuke from Ford, citing its low expected sales volume of less than 50,000 and being unable to benefit from economies of scale as barriers.

The factory in China will still continue to produce for Asian markets while Ford has another factory in Germany which will produce for Europe.

The Focus Active may be just one of the many cars that the U.S. will lose from its market, reducing consumer choices and raising prices. Of all the vehicles sold in U.S last year 48% were imported and those that are not imported also use a significant amount of foreign parts which can be subjected to tariffs.

Trump has announced USD 200 billion worth of tariffs on goods from China and is contemplating more, which would encompass all of China’s exports to the U.S.

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