After Trump Tweets that the Ford Focus Can ‘BE BUILT IN THE U.S.A.,’ Ford Explains Why That Would Make No Sense

Fortune

On Sunday, President Donald Trump tweeted approvingly about the 10-day-old news that his 25% tariffs on Chinese-made automobiles had led Ford f to decide against importing its compact Ford Focus Active model to the U.S. from the Chinese factories where the car is made.

“This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!” Trump exulted.

One problem: That’s not going to happen.

Ford’s North America product communications manager, Mike Levine, spelled it out for the president in a tweet noting “it would not be profitable to build the Focus Active in the U.S. given an expected annual sales volume of fewer than 50,000 units and its competitive segment.”

Ford didn’t move production of the Focus to China by accident; it did so because the U.S. market has shifted away from smaller vehicles toward SUVs, which has made production of the Focus in the U.S.—a relatively expensive location—an illogical choice.

The automaker decided a couple years back to shift production of the Focus to Mexico, then last year it opted for China instead. Earlier this year Ford cancelled all its smaller cars with the exception of the Mustang and the Focus Active.

Then, after Trump started threatening his new tariffs against China, Ford decided in August that it wouldn’t sell the Focus Active in the U.S. after all. The profit margins were simply too small to be worth it.

The auto-sector market economist Jon Gabrielsen told the Detroit Free Press that Trump’s tweet was “further evidence that neither the president nor his trade representatives have any clue of the complexities of global supply chains.”

“This forces Ford to forfeit the sales they would have had if they could continue to import that low-volume niche vehicle,” Gabrielsen said.

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Bill H
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Bill H

Guess what else COULD be made in the USA? “Trump” brand products.

jellybean
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jellybean

Um, I thought DT was supposed to be some ‘brilliant’ businessman. Seems to me, every time he tweets about business, it goes in the opposite direction.

Sarah
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Sarah

When will Trump hire American citizens to work at his own Golf resorts?

catherine
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catherine

I’m not an economist, but even I can figure out that when an auto plant is capable of manufacturing 1,000 vehicles a day, it doesn’t make fiscal sense to retrofit one to make only 50,000 vehicles a year. Basically, the tariff’s keeping Ford from importing these vehicles from their Chinese plant will hand the potential sales to other, probably non-American, companies like Subaru. Trump’s complete lack of understanding as to how manufacturing works really shines through this time.

Mangez Ma Merde
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Mangez Ma Merde

Trump understands the economy like a newborn understands theoretical astrophysics.

Gus
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Gus

Please vote in Nov. We need a check on his imbalance.

I hate Trump
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I hate Trump

Have you noticed that the tariffs don’t apply to Trump products made in China. He carefully selected industries that would not impact him.

Informed citizen
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Informed citizen

You mean Trump…the man who has declared bankruptcy in nearly every business he’s thought of, doesn’t know much about successful business practices?

Trump way
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Trump way

Businesses could adopt the Donald Trump business model to be more successful, which has been taught by Trump University and can be learned by studying Trump businesses. Rules include write generous contracts, and when it is time to pay, hire lawyers to fight suppliers that expect to be paid. When bills have to be paid, move as much money into your private accounts before declaring bankruptcy. It appears Donald is planning to use these rules while running the United States like one of his companies.

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