Trump Took Credit for Blocking Ford Production in Mexico That’s Moving to China

SK Ashby
Written by SK Ashby

When the Ford Motor Company backed away from its plans to produce the next generation Ford Focus in Mexico, Trump took credit for their actions by attributing the decision to his rhetoric, but the next Focus won't be produced in the United States.

Ford is shifting production to China.

It is the first major manufacturing investment decision made by new Chief Executive Officer Jim Hackett, who succeeded Mark Fields in late May. Discussion about the small-car production shift from Mexico to China began "a couple months ago" under Fields, said Joe Hinrichs, president of global operations.

Although it is cheaper to build and ship cars to the United States from Mexico than China, "this was not a variable cost decision," Hinrichs said in a Tuesday morning briefing. "It allows us to free up a lot of capital" because Ford now has to retool only one plant - the existing Focus factory in Chongqing - rather than two to supply North America.

The Ford factory in Michigan that currently builds the Focus will be re-tooled to produce trucks and SUVs instead because that's apparently what us dumb Americans want now.

This story makes me laugh for so many reasons and Trump inadvertently taking credit for production shifting to China is barely half of it. I also find it funny because there's no shortage of fools who would tell you free trade, or NAFTA, or the TPP or whatever are responsible for decisions like this, but it's far more complicated than that.

In this specific case, production is actually being shifted outside of the North American Free Trade Agreement (NAFTA) zone, which includes Mexico and the US, to China which is currently forming its own trade pact with countries abandoned by the United States under Trump. And production isn't moving there because it will be cheaper; it's moving there in response to market forces (that would be us consumers) displaying weak demand for small cars.

We live in a global economy and there will be no turning back the clock nearly 30 years to wipe out trade agreements that have already dramatically reshaped the global economic landscape. Politicians who even suggest that will happen are liars, and that includes liberals or Democrats who say so. It's a bad fantasy that could actually ruin us if it ever happened.