Ford won’t shift production of the Focus Active from China to the United States, dashing the hopes of President Donald Trump.
Last week, Ford revealed that it was dropping plans to import the Focus Active from China due to Trump’s tariffs on Chinese goods. The President thought these tariffs would force the automaker to shift production of the Focus Active from China to the U.S. but Ford says that isn’t happening.
Given that Ford expects no more than 50,000 annual sales for the Focus Active, it wouldn’t be profitable to build it in the United States, The Guardian reports.
“Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs.” CNBC. This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!
— Donald J. Trump (@realDonaldTrump) September 9, 2018
According to industry analyst Ed Kim from AutoPacific, there was a strong chance the Focus Active would have been sold in the United States if it wasn’t for the tariffs.
“Without the tariffs, the business case was pretty solid for that model in the US market,” he said.
Kristin Dziczek of the Center of Automotive Research says there’s simply no motivation for Ford to build the Focus Active in the U.S now.
“[Ford can make Focuses] in many other plants around the world, so if they decided to continue to sell a Focus variant in the US market, there are several options other than building it in the United States”.
On July 6, the United States started to impose a 25 per cent tax on $34 billion worth of Chinese imports, including motor vehicles. These tariffs have since been extended to an additional $16 billion in Chinese goods and in the near future, will be applied to another $200 billion in goods.