Ford Halts Its Plan To Sell Vehicle Made In China On US Market Amid Trade War

Ford Motor Company said it has defaulted on its initial plan to sell vehicles made in China on the U.S. market because of the possibility that tariffs on Chinse products could increase.

The American automaker announced Friday that it has reneged on its strategy to offer its Chinse-made car known as the Focus Active to American consumers because of the ongoing trade spat between China and the U.S. The Trump administration raised duties on Chinese-made vehicles up to 25 percent in July. The president could hand down another round of tariffs on $200 billion worth of Chinese goods in September when the public comment period ends.

"Given the negative financial impact of the new tariffs, we've decided to not import this vehicle from China," said Kumar Galhotra, president of Ford North America, during a conference call Friday morning.

Ford had long planned to phase out its Focus sedan model and replace it with its Focus Active, a crossover-sized four-door hatchback. The car was scheduled to start selling to U.S. customers late 2019. However, according to Ford officials, the Trump administration's duties on Chinese products and the possibility of additional tariffs changed their plans.

"Basically, this boils down to how we deploy our resources. Any program that we’re working on requires resources — engineering resources, capital resources," Galhotra said. "Our resources could be better deployed at this stage."

Still, the company looks to push forward production and sales of the Focus Active in Europe and China, Galhotra said.

Ford’s decision on Friday comes after a previous announcement earlier this year stating that it would slow its sales of cars in the U.S. in favor of SUVs and trucks.