Economy

Trump urges Ford, Apple to manufacture in US, not China

Trump urges Ford, Apple to manufacture in US, not China

"Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the U.S. because of the prospect of higher U.S. Tariffs".

Today, however, apart from contradicting Trump, Ford said that it would be adding hybrids, trucks, electric models, and utility vehicles to its USA lineup, in an effort to hit the 10 profit percent margin.

Trump declared victory on Sunday, writing: "This is just the beginning".

The Ford Focus Active has never been sold in the USA, and Ford does not now import any vehicles from China.

Ford didn't move production of the Focus to China by accident; it did so because the US market has shifted away from smaller vehicles toward SUVs, which has made production of the Focus in the USA -a relatively expensive location-an illogical choice. Simply put, establishing a local production of the vehicle would not make a successful business case.

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China will respond if the United States takes any new steps on trade, the foreign ministry said on Monday, after President Donald Trump warned he was ready to slap tariffs on virtually all Chinese imports into the United States.

Apple told trade officials in a letter on Friday that the proposed tariffs would affect prices for a "wide range" of Apple products, including its watch. Office Depot also said the tariffs would impact small- and medium-sized USA companies. "First, given the balance of Apple's economic footprint, the burden of the proposed tariffs will fall much more heavily on the United States than on China". That is why companies like Ford cannot sell their vehicles, which they make overseas, in the U.S. Automakers like to run plants on at least two shifts, and preferably three per day to cover the cost of building and equipping the factory, and to turn a profit. The consumer market in U.S. prefers smaller efficient vehicles like the SUVs.

Apple outlined how the company's operations and products will be affected by the tariffs. "Exciting!" Trump said in the tweet.

"Without the tariffs, the business case was pretty solid for that model in the United States market", he said.

Trump does not recognise "the complexity of supply chains and the types of inputs that go into decisions of where to locate one's production of different vehicles", Cutler said. Yet that overlooks other significant costs, such as the difference in wages between the USA and China. The plan, said industry analyst Ed Kim of AutoPacific, was to pare down the Focus lineup to Active wagons and import them from China.