Ford's new EcoSport model is set to become the smallest SUV in the Detroit automaker's line-up, but it could fuel the biggest debate over automotive trade.
That's because the little EcoSport will roll off a Ford assembly line in India, rather than one in the United States.
Ford has also made plans to move all of its small passenger car production from its U.S. operations to a new facility in Mexico - a decision frequently cited by President-elect Donald Trump during his campaign.
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The Republican candidate repeatedly warned that he would take steps to block Ford from importing Mexican-made passenger cars, if by no other means than adding hefty tariffs. Since last week's election, the incoming administration has sent signals it will not only try to tear up NAFTA and block a trans-Pacific trade deal but look at barrier-inducing tariffs against a variety of countries, possibly including China.
Ford is by no means the only automaker that could be impacted should this anti-import rhetoric turn into hard policy. A virtual Who's-Who of the world's automakers can be found either operating Mexican production facilities or setting up new plants there.
Toyota broke ground this week for a new assembly facility in Apaseo el Grande, in the central Mexican state of Guanajuato. It will produce the compact Corolla, the world's best-selling automobile and routinely one of the best-sellers in the U.S.
Other automakers, including Audi and Kia, have recently gone into production south of the border. A new factory set up by Nissan for its Infiniti luxury model will, in less than two years, begin turning out some Mercedes-Benz products, as well.
In some cases, these facilities will add to existing operations in other parts of the world—the Corolla is also built in Blue Springs, Mississippi, as well as at a factory in Canada, for example. But the new Audi plant will be the world source for the popular Q5 sport-utility vehicle.
Much of the attention in the current trade debate has focused on Mexico, in part because of the role critics contend the North American Free Trade Agreement has played in shifting automotive jobs out of the U.S. What is clear is that Mexico has become one of the five largest national manufacturers of automobiles in the world. But while low wages are a factor, so is the fact that the country has inked more global trade deals than any other nation in the world.
Ford tough on Mexico
Ford and other carmakers are so far showing no sign of pulling back from Mexico. William Clay Ford Jr., the automaker's chairman and great-grandson of Henry Ford, even met with candidate Trump to try to get the then-candidate to drop what Ford called "infuriating" rhetoric. That did little to cool the debate or take Ford out of the bullseye. And it remains to be seen if the EcoSport announcement will fan the fires.