Despite Trump tweet, Ford and Apple unlikely to shift manufacturing base to the U.S

President Trump suggested in Twitter that Ford and Apple can avoid import tariffs by shifting their manufacturing to the U.S. 

Ford on August 31 said it was dropping plans to ship the Focus Active from China to America considering Trump's new tariffs. And despite Trump’s tweet, Ford said it won't be moving production of its hatchback wagon Focus Active to the United States from China despite President’s claims.

Apple also warned in a letter earlier this month 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."

Mr. Trump proposed “an easy solution" when he said, "Make your products in the United States instead of China," while overlooking all other significant costs. CNBC.com reported, citing Bank of America Merrill Lynch that the higher U.S. labor cost would likely boost the price of Apple products by 20 per cent.  

In a company statement on Sunday, Ford said "it would not be profitable to build the Focus Active in the US" given forecast yearly sales below 50,000. The statement implies that Ford simply won't sell the vehicle in the United States now and concentrate on Asian and European market.

According to 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."

Ford announced in April that the company plans to stop manufacturing small and mid size cars in the US other than the iconic Mustang and to focus on more profitable SUVs. It stopped making Focus sedans at a Wayne, Michigan, plant in May. The general trend has been to build premium and luxury models and trucks and SUVs with high profit margins in the United States, Western Europe, and the United Kingdom, and to build compact cars in emerging economies. 

They had a plan to pare down the Focus lineup to Active wagons and import them from China. But a 25 per cent tariff on US$34 billion in Chinese imports, including motor vehicles on July 6 disrupted the plans for the company.

The U.S. and China are indulged in a trade war imposing and retaliating with counter tariffs, creating disruptions for the manufacturers as well as consumers.

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 US products. U.S. is alleging that China deploys predatory tactics to acquire U.S. technology and challenge American technological dominance by making cheaper products.