Trump urges Ford, Apple to manufacture in USA, not China
President Trump has a solution for how Ford and Apple can avoid getting dinged by his administration's tariffs: shift their manufacturing to the U.S.
Ford on Aug. 31 said it was dropping plans to ship the Focus Active from China to America, citing the Trump administration's new tariffs. Meanwhile, Apple warned in a letter sent earlier this month to the U.S. trade representative that a potential new round of tariffs would "increase the cost of Apple products that our customers have come to rely on in their daily lives."
In addressing Apple, Mr. Trump proposed what he called "an easy solution": "Make your products in the United States instead of China." Yet that overlooks other significant costs, such as the difference in wages between the U.S. and China. The higher expense of U.S. labor would likely boost the price of Apple products by 20 percent, CNBC.com reported, citing Bank of America Merrill Lynch.
Apple prices may increase because of the massive Tariffs we may be imposing on China - but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGA
— Donald J. Trump (@realDonaldTrump) September 8, 2018
"Our concern with these tariffs is that the U.S. will be hardest hit, and that will result in lower U.S. growth and competitiveness and higher prices for U.S. consumers," Apple wrote in the Sept. 5 letter.
As for Ford, the automaker in August said it was dropping plans to ship the hatchback-style Focus Active from China to America, citing Mr. Trump's new tariffs.
Mr. Trump took to Twitter Sunday to declare victory and write: "This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!"
But Ford on Sunday refuted Mr. Trump's claim, saying "it would not be profitable to build the Focus Active in the U.S." given forecast yearly sales below 50,000.
For now, that means Ford simply won't sell the vehicle in the United States. Kristin Dziczek of the Center for Automotive Research said that Ford can make Focuses "in many other plants around the world, so if they decided to continue to sell a Focus variant in the U.S. market, there are several options other than building it in the United States."
In April, Ford announced plans to stop making cars in the United States — except for the iconic Mustang — and to focus on more profitable SUVs. It stopped making Focus sedans at a Wayne, Michigan, plant in May. The plan, said industry analyst Ed Kim of AutoPacific, was to pare down the Focus lineup to Active wagons and import them from China. "Without the tariffs, the business case was pretty solid for that model in the U.S. market," Kim said.
“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.” CNBC. This is just the beginning. This car can now be BUILT IN THE U.S.A. and Ford will pay no tariffs!
— Donald J. Trump (@realDonaldTrump) September 9, 2018
The tariffs changed everything. The United States on July 6 began imposing a 25 percent tax on $34 billion in Chinese imports, including motor vehicles. Last month, it added tariffs to another $16 billion in Chinese goods and is readying taxes on another $200 billion worth. China is retaliating with its own tariffs on U.S. products.
The world's two biggest economies are clashing over U.S. allegations that China deploys predatory tactics — including outright cybertheft — to acquire technology from U.S. companies and challenge American technological dominance.