Ford cancels Focus crossover model, cites Trump tariffs

Ford Motor Co. announced on Friday that it will be canceling its plans to sell its new Chinese-built Focus Active in the U.S. next year, citing President Trump’s escalating trade war as the reasoning behind the move.

Kumar Galhotra, president of the car company’s North America division, said the president’s move to hit autos built in China with an additional 25 percent levy last month undermined the profitability of the new car, which the company had initially planned to ship into the country next year.

{mosads}“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 told reporters it wasn’t worth putting money into a car that they estimate would have sold fewer than 50,000 unit sales a year in the United States.

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.

The news arrives on the heels a report earlier this week stating that Trump may move to impose tariffs on $200 billion in Chinese goods right after the public comment period closes on Sept. 6.

The Trump administration already said last month it was considering imposing tariffs on a list of $200 billion of Chinese imports.