The Dearborn, Mich.-based automaker decided on Aug. 31 to stop development of the Focus Active crossover for U.S. customers because of the negative financial impact of new tariffs on vehicles imported from China.
Trade tensions between the U.S. and China have escalated over the last few months as Trump threatens additional tariffs on Chinese products; on Friday, Trump said he was prepared to put tariffs on essentially all Chinese goods imported into the U.S.
In a Twitter post on Sunday, President Donald Trump lauded Ford's decision to cancel plans to sell the Chinese-made Focus Active in the U.S., apparently after viewing a 10-day-old report about it on CNBC. "'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!"
"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
Following the president's Sunday morning tweet, Ford disputed the president's notion that the crossover could be built in the U.S. "It would not be profitable to build the Focus Active in the U.S. given an expected annual sales volume of fewer than 50,000 units and its competitive segment," the company said in a statement via email.
The canceled vehicle was not set to arrive in the U.S. until the second half of 2019, and Ford currently does not import vehicles from China, the company said.
And as the nation's second-largest automaker, Ford has an already sizable presence in the U.S., with more than 85,000 U.S. employees and more than 3,200 Ford dealers that support another approximately 166,000 jobs. Furthermore, Ford says 80% of what it sells in the U.S. is manufactured in the U.S., and it is the top U.S. exporter of vehicles.
In April, the company announced plans to cease making cars in the U.S. -- except for the Mustang -- in an effort to revamp the vehicle portfolio with more popular SUVs, trucks and electric vehicles.
Shares of Ford rose 1.6% to $9.42 at 11:30 a.m. New York time.
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