Ford Motor Co. announced on Friday that it is canceling plans to sell its new 2019 Ford Focus Active in the US next year due to tariffs imposed by President Trump as part of his escalating trade war with China.
Kumar Galhotra, president of the car company’s North America division, said Trump’s move to hit automobiles built in China with an additional 25 percent levy last month undermined the profitability of the new Ford Focus, which the company had initially planned to ship into the country next year.
“Our viewpoint on Focus Active was that, given the tariffs, obviously our costs would be substantially higher,” Galhotra said in a conference call, according to Bloomberg News.
“Our resources could be better deployed.”
Galhotra noted that it didn’t make sense for Ford to put money into a car that they estimate would have sold fewer than 50,000 unit sales a year in the U.S.
The Hill adds:
The automaker, which boasts it builds roughly 80 percent of the cars it sells in the U.S. in its home market, announced that it would build the crossover in China last year, claiming that production would be $500 million cheaper. Galhotra also said the company assembles 15 percent of the cars it sells in the U.S. in Canada and Mexico.
But with Trump’s recently announced 25 percent tariffs, the company said it plans to scrap the car and not sell any of them in the U.S. in the coming year.