Ford blames tariffs in decision to scrap Focus crossover import

Sep 02, 2018, 02:53

The automaker said that its decision to renege on previously announced plans to ship the Ford Focus Active crossover from Asia was based on 25-percent import tariffs imposed on vehicles built in China by President Donald Trump.

Ford Motor Co. announced on Friday that it will be canceling its plans to sell its new Chinese-built Focus Active in the US next year, citing President TrumpDonald John TrumpProsecutor: 20 guns found in home of man who threatened Boston Globe Trump officials identify 497 migrant children still in custody Trump says he knew Ocasio-Cortez would win MORE's escalating trade war as the reasoning behind the move.

Ford sells 2.5 million cars a year, so the Focus Active decision isn't hugely significant, but it could be a harbinger of other cuts by Ford or other American auto companies because of tariffs, reducing choice for US customers.

The vehicle, a Ford Focus with higher ground clearance and several other features, was expected to arrive in the United States from China by late 2019.

"The president's war on the automotive industry is causing a knee-jerk reaction that will only bring higher costs and less choice for consumers", the AutoPacific Inc.'s Dave Sullivan told The Free Press.

"Our resources could be better deployed".

Here's what the Ford Focus Active crossover is expected to look like.

Moody's Investors Service this week downgraded the company's credit rating to a step removed from junk, citing risks associated with a turnaround effort that Chief Executive Officer Jim Hackett has warned could be costly and take years.

Ford did not seek an exemption from the China tariffs, although rival General Motors did, on its made-in-China Buick Envision, the Detroit News reported. But the Trump administration's planned tariffs on Chinese imports would make the plan too expensive.

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

When asked about its plans, Ford's spokesperson told us, "Ford is growing its vehicle lineup - including introducing all-new trucks, utilities, hybrids and fully electric vehicles - and is committed to returning operating margins to 10 percent in North America".