New York - On the same day that Donald Trump threatened GM with a "high border tax" if it opened a plant in Mexico, Ford announced that it had given up investing $ 1.6 billion in a plant in the neighboring country. Instead, it said it will expand electric vehicle production in the US by injecting $ 700 million into a facility in Michigan. The automaker was targeted by Trump because of its investment plans in Mexico. "Ford has announced that it has canceled plans for a new plant in San Luis Potosí, Mexico," the company said in a statement, adding that it will allocate $ 700 million over four years to produce electric cars in Michigan.
Trump repeatedly said during the election campaign that if elected would not allow Ford to open a new factory in Mexico and could impose heavy tariffs on imported Ford vehicles. But Ford's chief executive Mark Fields said on Tuesday that the ruling was in part related to the need to "fully utilize the capacity of existing facilities" amid a drop in sales of small and medium-sized cars such as Focus and Fusion.
'Vote of confidence in Donald Trump
The investment in the US is a "vote of confidence" in the Trump administration, Fields told CNN, denying that the company has made any deal with the new president. Earlier, the new US president used Twitter to threaten GM with taxation should the company take the lead in manufacturing a Chevrolet model in Mexico sold in the United States.
"General Motors delivers Chevy Cruze cars, made in Mexico, to its US dealers without paying taxes. "Produce in the United States or pay a high border tax", twitted Trump, who takes office January 20. General Motors is sending the Mexican made model of Chevy Cruze to U.S. car dealers tax-free across the border. Make in U.S.A.or pay big border tax!
- Donald J. Trump (@realDonaldTrump) January 3, 2017. The Mexican government said on Tuesday that it regretted Ford's decision to cancel the factory's design in the country. The Ministry of Economy said in a statement that it ensured the replacement by Ford of any expense made by the government of San Luis Potosí to facilitate the investment that would be made by the American company.
Trump promised to withdraw from NAFTA
The note also says that the government of President Enrique Peña reaffirms its position "towards an effort to modernize the NAFTA (North American Free Trade Agreement), which strengthens the competitive capabilities of North America and each of its members ". During the campaign, Trump promised to withdraw from NAFTA, which brings together USA, Mexico, and Canada. The agreement allows General Motors to manufacture in Mexico and import into the United States duty-free. As a result of the automaker's announcement, Ford's shares rose 3.3%, while the Mexican peso reacted negatively, falling to 21.00 units per dollar, reaching the lowest level in seven weeks. Also on Tuesday, the Republican appointed Robert Lighthizer, a lawyer specializing in dumping and protectionist history, to the position of Foreign Trade Representative, a bureau responsible for negotiating trade agreements and treaties and actions in multilateral organizations such as the World Trade Organization (WTO).
"Ambassador Lighthizer will have a prominent mission representing the US in the fight for good trade agreements that put the American worker first," Trump said in a statement displeased by his committee.
