Ford blames tariffs in decision to scrap Focus crossover import

Ford blames tariffs in decision to scrap Focus crossover import

Ford Motor Co.is canceling plans to import a new crossover model from a plant in China after President Donald Trump's tariffs undermined the business case for bringing the vehicle to the US market.

Trump's move to slap China-built autos with an additional 25 per cent levy in July undermined the profitability of the Focus Active that Ford planned to start shipping into the USA about a year from now, Kumar Galhotra, president of North America, said in a conference call with reporters. Ford told Automotive News that even if the tariffs were retracted, the company wouldn't change course and import the Active. The company projects it sells less than 50,000 Focuses annually - a "marginal" volume that wouldn't warrant US production.

But the 25% tariff now in place upended the economic case for importing the vehicle, said Kumar Galhotra, head of Ford North America. "The significant thing that moved was the tariffs going up substantially higher".

"Our resources could be better deployed". Then past year, Ford announced it would instead build the brand in China and import it, which the company said would be even cheaper. The company is involved in a global restructuring expected to cost $11 billion over the next three to five years. The remainder of its deliveries are primarily comprised of two models imported from India and Spain: the EcoSport crossover and the Transit Connect van. That may sound like a lot of cars, but to Ford that makes the Focus Active "low volume".

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Ford told reporters Friday that the tariffs would too deeply cut into profits, especially since the automaker only planned to sell fewer than 50,000 Focus Active models annually.

General Motors recently asked for an exemption on its China-made Buick Envision, which is now under review.

The Trump administration has so far slapped 25 percent tariffs on $50 billion in Chinese goods.

But with Trump's recently announced 25 percent tariffs, the company said it plans to scrap the vehicle and not sell any of them in the U.S.in the coming year.

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