Trump to Ford: Build it in U.S.

But firm stands by plan for auto

President Donald Trump insists his trade war with China will spur more manufacturing jobs in the U.S. Two of the companies he's targeted -- Apple Inc. and Ford Motor Co. -- disagree.

Citing Trump's new tariffs, Ford on Aug. 31 said it was dropping plans to ship the Focus Active from China to America.

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!"

The automaker has already said it has no plans to restart production elsewhere. Ford said the Trump administration's 25 percent levy on China-built autos undermined the profitability of the car.

Ford stood by its decision.

"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," Mike Levine, a spokesman for the company, tweeted in response to the president's tweet.

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."

A day earlier, the president exhorted Apple to start building new plants in the U.S. after the tech giant warned that a proposed $200 billion in new tariffs on Chinese imports would jack up the price of its products.

"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 said in a Sept. 5 letter to the office of U.S. trade representative. It asked the government to come up with other measures to bolster the economy. Back in May, CEO Tim Cook told Trump that duties "were not the right approach."

Apple didn't immediately respond to a request for a comment on Trump's latest broadside.

The U.S. has imposed $50 billion worth of tariffs on Chinese goods with another $200 billion in the final stages. The public had until Thursday to comment on the administration's plan. Trump said Friday he is considering another $267 billion of tariffs on China, which analysts said will affect virtually every category of consumer goods, to retaliate against what he calls unfair trade practices.

In Ford's case, pulling the plug on the low-volume Focus Active won't be hugely significant to its business because it sells more than 2.5 million vehicles annually in its home market. But automakers may cull other vehicles as well if Trump continues to escalate trade wars with the likes of China, Europe and Canada.

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.

TRADE SURPLUS WIDENS

China's trade surplus with the United States widened to a record $31 billion in August as exports surged despite American tariff hikes, potentially adding fuel to Trump's battle with Beijing over industrial policy.

Exports to the United States rose 13.4 percent to $44.4 billion, ticking up from July's 13.3 percent growth, according to customs data. Imports of U.S. goods rose 11.1 percent to $13.3 billion, decelerating from the previous month's 11.8 percent.

That could help reignite U.S. demands that Beijing narrow its trade gap, which has temporarily been overshadowed by their clash over complaints China steals or pressures foreign companies to hand over technology.

With no settlement in sight, the spiraling conflict between the two biggest economies has fed fears it will chill global trade and economic growth.

The Commerce Ministry expressed confidence Thursday that China can maintain "steady and healthy" economic growth despite the trade pressure.

Chinese leaders have rejected pressure to scale back plans for state-led development of global champions in robotics and other technologies.

Their trading partners complain those violate Beijing's free-trade commitments and U.S. officials worry they might erode American industrial leadership. But communist leaders see their industry plans as the path to prosperity and global influence.

As tensions mounted, Beijing agreed in May to narrow its trade gap with the United States by purchasing more American soybeans, natural gas and other exports. Chinese leaders scrapped that deal after Trump's first tariff hikes hit.

Chinese exporters of lower-value goods such as handbags and surgical gloves say U.S. orders have fallen off. But sellers of factory machinery and other more advanced exports express confidence they can keep their U.S. market share.

The Chinese customs agency took the rare step of announcing August trade data on Saturday instead of a working day. That would give financial markets a chance to digest the politically sensitive data before trading opens today.

The Chinese trade gap with the United States was up from July's $28 billion and June's $29 billion. Beijing reported a record $275.8 billion trade surplus with the United States last year.

Forecasters had said China's sales to the United States, its largest national export market, might weaken after manufacturers rushed to fill orders ahead of Trump's first tariff hike July 6. But trade data have yet to show a significant impact.

China's global exports rose 12.2 percent to $217.4 billion, down from July's 12.6 percent. Imports rose 20.9 percent to $189.5 billion, down from 21 percent.

The country's global trade gap was $27.9 billion. That meant that without sales to the U.S. market, China would have run a trade deficit.

China regularly runs deficits with many of its trading partners that supply oil, industrial components and other imports and pays for those by running a surplus with the United States and Europe.

Exports to the 28-nation European Union, China's biggest trading partner, rose 11 percent to $37 billion. Imports rose 15 percent to $24.9 billion, leaving a surplus of $6.1 billion.

Information for this article was contributed by Gabrielle Coppola, David Welch and Mark Gurman of Bloomberg News; and by Joe McDonald and Paul Wiseman of The Associated Press.

A Section on 09/10/2018

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