What are we to make of the surprising facts that Ford now plans to make the Focus in China and that the Trump administrations response is, essentially, whatever? Economic reality is stubborn. Gas prices are plunging. Ergo, the American consumer can afford to indulge a preference for larger vehicles, to the detriment of smaller, fuel-efficient models such as the Focus. Trump’s coercion was bound to fail, and while its not ideal to see any production shift overseas, kudos to Ford for calling Trump’s dictatorial bluff. A second lesson is that government subsidy can’t overcome fundamental market dynamics.
To read the full article in The Washington Post, June 27, click here.