President Donald Trump started Sunday with another one of his Twitter storms. Among the topics he weighed in on were Barack Obama, the economy, the NFL, and North Korea. He also tweeted about last month's news that Ford scrapped its plans to import the Chinese-made Focus Active to the U.S. due to his proposed 25 percent auto tariffs, which he viewed as a victory.
"This is just the beginning," Trump tweeted. "This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!"
As usual, things are a bit more complicated than Trump (or Twitter) makes them seem. What Trump seems to have forgotten is the car already was made in the United States. Ford built the Focus in Michigan for years, as recently as 2017. The whole reason production was moved to China was so the company could afford to continue selling the low-selling car.
“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
The company had originally planned to move production of the car to a new $1.6 billion factory in Mexico. Following pressure from Trump in 2016, Ford scrapped plans to build the new Mexican factory in early 2017, but still planned on shifting production of the Focus from Michigan to Mexico. Instead, the cars would be built in an existing Mexican factory, which the company said would save $500 million.
Later in 2017, the company shifted gears again, with the new plan to build the next generation of the Focus in excess factory space China, where it would begin importing a version of the car called the Focus Active to the U.S. starting in late 2019 — a move the company said would save another $500 million.
Earlier this year, Ford announced it would kill off all of its cars except for the Focus Active and the Mustang in favor of trucks, SUVs, and commercial vehicles. But the prospect of a 25 percent tariff caused Ford to once again change plans, and the company canceled plans to import the Focus to the U.S. last month.
As The Wall Street Journal reported, the car "had become well-known in the U.S. as a popular choice for budget-minded shoppers looking for better fuel-efficiency." The tariff, though, made it a "very difficult business case for us, so we’re choosing to deploy these resources elsewhere," Ford's head of North America told reporters in August.
So no, Trump — the Focus likely isn't coming back to the U.S. And as WSJ notes, aside from the Ford Focus, Trump's 25 percent vehicle tariff on Chinese imports has so far had minimal effect on automakers since few vehicles are shipped from China for sale in the U.S. (The tariff has had more of an effect on auto parts.) The only company that imports a significant number of Chinese-made cars to the U.S. is General Motors with its Buick Envision. GM has asked Trump for an exemption on the tariff.
Stay on top of Detroit news and views. Sign up for our weekly issue newsletter delivered each Wednesday.
