Ford Motor Company has made the decision to halt exports of several vehicle models to China in response to the retaliatory trade tariffs imposed by the Chinese government. According to a report by the Wall Street Journal, China has implemented tariffs as high as 150% on vehicles such as the F-150 Raptor pickup truck, Mustang sports car, Bronco SUV, and Lincoln Navigator, all of which are manufactured in Michigan and Kentucky.
The move to suspend exports of these popular models comes as a response to the escalating trade tensions between the US and China. Last year, Ford exported approximately 5,500 units of these vehicles to the Chinese market, a significant decline from previous years when the average was over 20,000 units annually.
Despite the suspension of vehicle exports, Ford will continue to ship US-built engines and transmissions to China. Additionally, the company will maintain imports of the Lincoln Nautilus from China to the US.
The decision to cease exports to China is part of Ford’s efforts to navigate the shifting tariff landscape and mitigate the impact of the trade dispute on its operations. The company, along with other manufacturers, has experienced declining sales in China, partly due to the increasing dominance of domestic Chinese car brands.
Ford’s sales in China dropped to around 400,000 vehicles last year, a significant decrease from approximately 1.3 million in 2016. However, the company’s operations in China still generated an operating profit of about $900 million last year, as reported by Ford vice-chairman John Lawler.
In response to the tariffs, Ford is considering increasing the prices of its new vehicles if the trade restrictions remain in place. An internal memo sent to dealers, as seen by Reuters, suggested that price adjustments may be necessary.
In a separate development, President Trump hinted at the possibility of modifying auto-related tariffs, indicating that exemptions on current levies could be considered. This news comes as Ford recently announced plans to invest up to €4.4 billion ($4.8 billion) into its German subsidiary, Ford-Werke, to enhance competitiveness and revitalize its business.
Overall, Ford’s decision to suspend exports to China underscores the challenges posed by the ongoing trade tensions between the US and China. The company is taking strategic measures to adapt to the changing tariff landscape and ensure the sustainability of its operations in the global market.
