China's Record Trade Surplus With US Adds Fuel to Trade War Fire

Ford Focus on display in China

China will respond if the United States takes any new steps on trade, the foreign ministry said on Monday (Sept 10), after President Donald Trump warned he was ready to slap tariffs on virtually all Chinese imports into the United States.

In a tweet Sunday, Trump said Ford's decision not to import a new sport-utility vehicle from China means the Focus Active "can now be built in the U.S.A".

Ford Motor Company is not planning to build its Focus Active vehicles in the U.S.

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

Last week, Apple said in a letter to U.S. Earlier this year Ford cancelled all its smaller cars with the exception of the Mustang and the Focus Active.

Ford has traditionally produced a range of sedans, including the Focus, Taurus and Fiesta.

The company said about 80% of the vehicles Ford sells in the United States are built domestically. After the earlier tariffs targeting US$50 billion of U.S. goods, that leaves barely US$100 billion for retaliation, or half of Trump's US$200 billion list of goods for the second round of tariffs. Start building new plants now.




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

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.

The tariffs changed everything.

Mr Trump last Friday threatened duties on another US$267 billion (S$368 billion) of goods on top of US$200 billion in imports primed for levies in coming days.

China has threatened retaliation, which could include action against U.S. companies operating there. He wrote on Twitter, "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".

The world's two biggest economies are clashing over US allegations that China deploys predatory tactics - including outright cybertheft - to acquire technology from USA companies and challenge American technological dominance. These tariffs have since been extended to an additional $16 billion in Chinese goods and in the near future, will be applied to another $200 billion in goods.

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