Ford Motor Co said it has no plans for now to hike prices of imported Ford and Lincoln models in China, despite additional tariffs on U.S. vehicles due to be applied from Friday, Reuters reports.
The U.S. carmaker, which has been facing sluggish sales in the world’s largest auto market, said in a statement on Thursday “it has no current plans to increase the manufacturer’s suggested retail price (MSRP) on its import line-up in China”.
Ford’s move, which would mean it taking a hit on margins on imported cars, makes it the first foreign automaker to address pricing issues ahead of the new tariffs that will affect around $34 billion of U.S. imports from soybeans and cars to lobsters.
Ford has much to lose if rising trade tensions between China and Trump escalate into a full-blown tariff war. Last year, it shipped about 80,000 vehicles to China from North America, more than half of them its upper-end Lincolns – including the Lincoln Continental sedan and the Lincoln MKX crossover SUV.
China, which just days ago cut tariffs on all imported automobiles, plans to slap an additional 25 percent levy on 545 American products, including U.S.-made cars, should the Trump administration go ahead with plans to implement tariffs on $34 billion of Chinese imports from July 6.
Ford encouraged Washington and Beijing to resolve their dispute and said it would “monitor the situation as it evolves”.
All Lincoln vehicles that Ford sells in China are imported from North America. Last year the brand sold 54,124 vehicles in China, the world’s largest auto market, up 66 percent from 2016.
Ford and Lincoln both cut prices on imported models in May after China announced steep tariff cuts for automobiles and car parts that came into effect from July 1.
Ford’s imported vehicles have faced unusual delays at customs recently, with officials asking for extra technical checks, Reuters reported in May. A source had said at the time the hold-ups were related to the trade dispute.
Other firms that export U.S.-made cars to China include BMW (BMWG.DE), Daimler AG’s (DAIGn.DE) Mercedes and Tesla (TSLA.O).
The trade-related issues are cropping up for Ford at a time when it is suffering from a big sales slump in China caused by a lack of new models in its line-up. Last year, its sales fell 6 percent even as overall vehicle sales in China rose 3 percent.