Global car giant Ford has cancelled plans to build a new $1.6bn plant in Mexico and will instead invest $700m in a Michigan manufacturing base, just hours after president elect Donald Trump blasted rival General Motors for building some of its cars south of the border.
Mr Trump had used Ford as a whipping boy during his presidential campaign, suggesting that it was moving manufacturing jobs to Mexico which should have been for US workers and vowed to slap a 35pc tariff on Ford vehicles made in Mexico but sold in the US.
He has repeatedly called for a rework of the North American Free Trade Agreement with Mexico and Canada.
Ford chief executive Mark Fields said that building the Michigan plant in the US was a “vote of confidence” in the US economy.
The company had previously fought back against Trump’s rhetoric, saying it did not plan to cut any US jobs.
Instead of now building its Focus model in Mexico, it will build it in the US, creating an estimated 700 jobs, although the company denied that Mr Trump had influenced its decision.
“Instead of driving jobs and wealth away, America will become the world's great magnet for innovation and job creation,” Mr Trump tweeted following the news.
The motor giant's announcement came shortly after the president elect hit out at General Motors via Twitter, suggesting it was sending its “Mexican-made model of Chevy Cruze to US car dealers tax free across border [sic]”.
He went on to say that the company, which makes Chevrolet, Cadillac and Vauxhall cars, should “make in USA or pay big border tax”.
General Motors released a statement following Mr Trump’s tweet, which said its Chevrolet Cruze sedan model is manufactured in Lordstown, Ohio. It added that the hatchback model is built in Mexico for global markets, including a “small number” sold in the US.
General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!— Donald J. Trump (@realDonaldTrump) January 3, 2017
The saga is the latest in a line of trade deals being played out in the public arena since Mr Trump was elected president of the United States in November.
In recent weeks Mr Trump has also called for the scrapping of multi-billion dollar plans for Boeing to build a new Air Force One, calling the costs "ridiculous and totally out of control", and threatened to cancel the F-35 jetfighter program with Lockheed Martin.
He also slammed agricultural machinery manufacturer Rexnord for moving its Indiana jobs to Mexico, with the loss of 300 jobs. “This is happening all over our country,” Mr Trump said on Twitter on December 2.
Other companies in Mr Trump’s crosshairs include Amazon, which he accused of not paying “fair taxes”, T Mobile, whose service was “terrible”, he said, and department store Macy, whose stock is in “total free fall”.
Mr Trump named steel industry lawyer Robert Lighthizer as his US trade representative on Tuesday. Mr Lighthizer, an experienced trade official, served as the deputy US trade representative under Ronald Reagan where he played a part in developing US trade policy.
He is a hard critic of China’s trade practices, suggesting that the country has failed to live up to commitments made in 2001 when it joined the World Trade Organization and that more aggressive tactics are needed to "force change in the system", even if it means deviating from WTO rules.
Mr Lighthizer will be responsible for better deals aimed at reducing US trade deficits.
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US President-elect Donald Trump on Tuesday blasted General Motors Co and threatened to impose a "big border tax" for making some Chevrolet Cruze cars in Mexico, which the U.S. carmaker defended as part of a strategy to serve global customers, not sell them in the United States.