Apple partners falter after Trump demands production shifts

Ford Focus Active the small crossover causing so much controversy in the US

"Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive".

On 31 August, citing Trump's new tariffs, Ford said it was dropping plans to ship the Focus Active from China to America.

A Ford spokesman responded on Twitter.

Traders were bracing for a potential escalation in the Sino-U.S. row after President Donald Trump raised the stakes on Friday, saying he is ready to impose tariffs on virtually all Chinese imports to the United States.

With consumers switching from cars to utility vehicles in droves, Ford announced earlier this year that it would ditch the current version of its Focus small auto in favor of a higher-riding crossover called the Focus Active.

The notion that a USA manufacturer's decision not to sell one of its products in the United States is a victory for Trump's "America First" trade agenda has bewildered observers, including a number of former U.S. trade officials.

The Focus Active may be the first vehicle officially killed by the administration's tariffs, but it likely won't be the last.

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Ford, however, has no plans to move production to the United States. The data points to a job market that remains resilient after almost a decade of economic growth, and even with tariffs and counter-tariffs on imports and exports looming over USA employers that rely on global trade. It stopped making Focus sedans at a Wayne, Michigan, plant in May.

Apple is highly exposed to a trade war between the U.S. and China.

The plan, said industry analyst Ed Kim of AutoPacific, was to pare down the Focus lineup to Active wagons and import them from China.

In Ford's case, pulling the plug on the low-volume Focus Active won't be hugely significant to its business because it sells more than 2.5 million vehicles annually in its home market. The profit margins were simply too small to be worth it.

For the Focus Active, the tariffs on Chinese vehicles changed everything.

The $200 billion of Chinese goods on the USA list includes some consumer products such as cameras and recording devices, luggage, handbags, tires and vacuum cleaners, with additional tariffs ranging from 10 to 25 percent. China has retaliated in kind, and Washington and Beijing have continue to ratchet up threats of more tariffs. As pointed out in the Detroit Free Press, China's import tax for World Trade Organization members like the United States was 15 percent, since raised to 40 percent.

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