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Ford Scraps plan to import China-Built Small Car due to tariffs



Ford Motor
Co.


F -2.16%

has dropped plans to import its Focus compact vehicle from China to the US starting next year, with an expected impact from the Trump's import tariffs. Administration Announces

Ford had planned to begin a new version of Focus from China in the second half of 2019. But the current 25% tariff boosted the economic case of importing the vehicle, said Kumar Galhotra, head of Ford North America.

The tariff made it a "very difficult business for us, so we decide to use those resources elsewhere," Mr. Galhotra told reporters during a telephone conference on Friday.

Ford recently broke off Focus's US production, but said it would be manufactured again as a small crossover commercial vehicle in China next year. The decision to mend the import plan means that Focus's name tag will no longer be sold in the US, a spokesman said.

The move signals that the Trump government's trade policy has begun to influence important production decisions in the auto industry. So far, many car managers have taken a wait-and-see attitude, hopeful that the government would change course or enter into new trade agreements.

Ford has said that the new version of Focus was considered a relatively light seller in the US ̵

1; projected at less than 50,000 vehicles annually – and these volumes do not guarantee US production. The company said it would be cheaper to use surplus factory space in China than to continue building the Focus at a factory in Detroit where it has been manufactured for years.

In 2016, Ford said that this was the case. She shifted Focus's production to an existing factory in Mexico, but switched to the China import plan last year and said it would cost about $ 500 million cheaper than the effort south of the border.

The 25 percent vehicle tariff The effect in July was problematic for some automotive suppliers, but had little effect on carmakers so far. Few Ship Vehicles From China For Sale In The US General Motors Co. became the only car company to do so in significant numbers in 2016, when it began importing a Buick Envision SUV built in China.

GM has asked the Trump administration for an exemption from Envision's tariffs, suggesting that it may withdraw the vehicle from the US market if the request is not granted. Mr. Galhorta said that Ford did not seek clearance for the focus.

Mr. Galhotra said the decision will have a "marginal" impact on the car maker's future sales in the US, where Ford plans to increase the number of license plates offered on 23 nameplates within five years – despite plans to eliminate multiple vehicle lines. Ford has said it would add more trucks, SUVs, and electric and hybrid models to respond to consumer demands.

Write to Mike Colias at Mike.Clias@wsj.com


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