FORD Motor Co. has abruptly killed a plan to sell a Chinese-made small vehicle in the United States because of the prospect of higher U.S. tariffs, the head of the automaker’s North American operations said Friday.

The automaker’s decision came as U.S. President Donald Trump is escalating a trade battle with China, threatening to impose duties on another US$200 billion in Chinese goods.

The Trump administration has already imposed duties on Chinese-made vehicles of up to 25 percent. Trump is separately evaluating a proposal to impose tariffs on all imported vehicles on national security grounds.

The Chinese-made Focus Active, which Ford calls a crossover, would have been a niche vehicle for the United States, and the decision to abandon plans to launch it in the U.S. market next year will not cost jobs or have a significant impact on the automaker’s U.S. sales, Ford North America chief Kumar Galhotra told reporters during a conference call Friday.

“It basically boils down to how we deploy our resources,” Galhotra said. Given the prospect of high tariffs, the Focus Active’s costs in the United States “would be substantially higher.”

Asked when the decision was taken, Galhotra said, “we just made it. Literally.”

Plans to build and sell the Focus Active in Europe and China will move ahead, Galhotra said.

Ford’s decision to abandon the Focus Active contrasts with the effort by rival General Motors Co. to seek an exemption to new, 25-percent U.S. tariffs on its Buick Envision utility vehicle.

The Envision is a larger vehicle than the Focus Active, with a starting price of about US$35,000. Ford had not set a U.S. price for the compact Focus Active, but it would have competed in a segment where prices start at around US$20,000, leaving less profit margin to absorb additional import duties.(SD-Agencies)