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Ford Motor Co. on Friday canceled plans to import the Focus Active crossover from China to the United States because of costs from the escalating trade war.
“Given the negative financial impact of the new tariffs, we’ve decided to not import this vehicle from China,” Kumar Galhotra, president of Ford North America, told reporters during a hastily scheduled conference call at 10 a.m.
Ford Motor Co. on Friday canceled plans to import the Focus Active crossover from China to the United States because of costs from the escalating trade war.
“Given the negative financial impact of the new tariffs, we’ve decided to not import this vehicle from China,” Kumar Galhotra, president of Ford North America, told reporters during a hastily scheduled conference call at 10 a.m.
The Focus Active was meant to take the place of the Ford Focus in the U.S. because Ford is phasing out the entry-level car as it shifts its production to pickups and SUVs. Focus Active was scheduled to go on sale in the late summer of 2019.
“Basically, this boils down to how we deploy our resources. Any program that we’re working on requires resources — engineering resources, capital resources,” Galhotra said. “Our resources could be better deployed at this stage.”
Tariffs imposed by President Donald Trump on Chinese products and the threat of more had a direct impact on this week's decision, according to Ford officials. The United States already has imposed tariffs on steel and aluminum from China and, as of July, put a 25 percent tax on autos imported from China.
Analysts were alarmed.
“The president's war on the automotive industry is causing a knee-jerk reaction that will only bring higher costs and less choice for consumers," said Dave Sullivan, manager of product analysis at AutoPacific Inc.
Galhotra said: “We monitor these products continuously, monitor for all external forces that might change the business case. The significant thing that moved was the tariffs going up … "
Ford had to make a call on profitability of each product, Galhotra said, explaining that the Focus Active's U.S. sales were expected to be “marginal,” fewer than 50,000 a year.
Ford will continue make the product in China for China and in Europe for Europe.
https://www.freep.com/story/money/cars/2018/08/31/citing-trade-war-ford-cancels-plan-import-small-suv-china/1156427002/