Ford corrects Trump over US-made Focus Active claim

Despite Trump tweet Ford says it won’t make hatchback in US	 	 	 			KAREN BLEIER  AFP  Getty Images

The US President said he would levy additional taxes on $267bn (£206.28bn) of goods over and above planned tariffs on $200bn (£154.52bn) of Chinese products.

Chien Bor-yi, an analyst at Taipei-based Cathay Futures Consultant, said Apple's component supply chain in Taiwan would take a major hit if the United States increased tariffs on Chinese imported products.

In its statement, Ford said, "It would not be profitable to build the Focus Active in the USA", citing meager sales forecasts for the Focus Active in the states. Simply put, establishing a local production of the auto would not make a successful business case.

Whirlpool Corp said proposed tariffs on components from China would increase costs and create supply chain problem for USA manufacturers, putting them at a competitive disadvantage.

For instance, as CNBC reported, the Koch Network launched a six-figure ad campaign, meant to campaign against Trump's tariffs. The United States on July 6 began imposing a 25 percent tax on $34 billion in Chinese imports, including motor vehicles.

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But Ford said last month that it was scrapping that plan because Trump's tariffs would make the cars too expensive. Office Depot also said the tariffs would impact small- and medium-sized US companies. It will continue to sell the vehicle outside the states. That left American companies on edge about whether Beijing might use its control over the heavily regulated economy to disrupt their operations by withholding licenses or launching tax, anti-monopoly or other investigations.

Ford has already announced it will eventually stop selling all passenger cars in the US except the Mustang, in favor of meeting Americans' appetite for large - and profitable - trucks and SUVs. Executive James Farley said at an investor's conference in January that the carmaker's lineup is "shifting from cars to utilities". All three Detroit automakers have made it clear that they're going all-in on SUVs and trucks.

The Chinese plant isn't the only location where Ford will build the fourth-generation Focus so the automaker has alternative options for sourcing the Focus Active variant for the USA market, should the vehicle still be planned for our market.

The automaker decided a couple years back to shift production of the Focus to Mexico, then last year it opted for China instead.

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