Ford Motor (F) has scrapped plans to import its small Focus Active car to the U.S. from China because Trump tariffs could kill its profit margin. The decision is an early loss for Beijing in the China trade war.
XYet the U.S. also is taking fire in the China trade war. In retaliating against the initial Trump tariffs, Beijing imposed 25% tariffs on imports of cars from the U.S. That led BMW (BMWYY) to announce a shift in some SUV production overseas from its Spartanburg, S.C., plant.
Meanwhile, Tesla (TSLA) aims to dodge tariffs by building a plant in Shanghai to serve the Chinese market. That could take several years though.
Ford's decision comes as President Trump has reportedly decided to escalate the China trade war. He plans to move forward with Trump tariffs on an additional $200 billion worth of Chinese imports, including auto-related imports. The decision could come late next week, after the Sept. 5 close of the official comment period on the tariff plan.
Ford won't go forward with plans to sell the China-made compact Focus Active vehicle in the U.S., but will still sell it in Europe and China.
The move comes as Ford saw Moody's downgrade its credit rating to a notch above junk, requiring a focus on deploying resources in the most cost-effective way.
While roughly 95% of Ford vehicles sold in the U.S. are assembled in North America, Reuters reported Ford as saying that it will continue to import EcoSport small sport-utility vehicles from India and Transit Connect small vans from Spain.
General Motors (GM) has sought an exemption from Trump tariffs on its $32,000 Buick Envision compact SUV that is produced in China.
Trump Tariff Threats Continue
Meanwhile, President Donald Trump told Bloomberg News in an interview released late Thursday that a European Union offer is not enough to keep him from imposing 25% tariffs on European cars and parts. On Friday, U.S. and Canada trade talks ended without an agreement, though negotiations will continue. The Canadian auto industry is closely tied with America's.
Ford fell 2.3% in Friday's stock market trading. GM stock sank 0.85%. Ford stock closed down for the week after rallying earlier from the U.S.-Mexico trade deal that included new provisions on auto production. GM stock erased nearly all its weekly gain.
YOU MIGHT ALSO LIKE:
Did President Trump Just Call A Stock Market Top?
IBD 50 Stocks To Watch: Hot Growth Stock Setting Up New Buy Point
The Big Picture: These 3 Tech Titans Are Driving The Nasdaq
Lululemon Leads These 5 Key Earnings Movers
The post Trump Tariffs Just Killed Ford Imports From China appeared first on Investor's Business Daily.
http://feedproxy.google.com/~r/BusinessRss/~3/kpkeqQnY80M/
No comments:
Post a Comment