President Donald Trump had offered some really good business advice to Ford Motor on Sunday. He suggested Ford that since the administration’s tariffs on car imports from China are very high, Ford should start making its Focus Active in the United States itself.
To this, Ford provided a very valid reason for not being able to go ahead with this.
The company said that it would not be profitable to build the Focus Active, a compact crossover, in the United States given an expected annual sales volume of less than 50,000 units.
The statement from Ford came after Trump tweeted about an article from August 31, when the car manufacturer announced that it was canceling it’s plans to build the Focus Active, in China and ship to the United States.
Trump wrote, in his tweet that this is just the beginning and the car can now be built in the United States and Ford will not have to pay any tariffs.
The Trump team had imposed tariffs on $50 billion worth of Chinese goods in a move which the President touted as necessary to punish Beijing for its unfair trade practices and intellectual property theft. These goods include some automobiles as well. Though China has retaliated in kind, Washington and Beijing have continued to ratchet up threats of more tariffs.
Michael Levine, the Ford spokesman said the Focus Active is built in Europe and the company had plans to begin manufacturing the vehicle in China in the latter half of next year and exporting them to the US market.
However, the company said last month that it was scrapping the plan as Trump’s tariffs would make the cars very expensive.
Ford also reaffirmed that it does not have any plans to start making the car on US soil and it will continue to sell the vehicle outside the states.
The car manufacturer had already announced earlier this year that it would reallocate $7 billion of research and development funds from cars to trucks and SUVs.
James Farley, one of its executives said at an investor’s conference in January that Ford’s lineup is shifting from cars to utilities. He added that it’s not just Ford, all three Detroit automakers have made it clear that they’re going all-in on trucks and SUVs.
In another statement Ford added that it is committed towards growth of its U.S. vehicle lineup which includes all-new trucks, hybrids, utilities and fully electric vehicles.
The company said that around 80% of the vehicles that it sells in the United States are built domestically.