Ford plans to produce new Lincoln models in China to save on costs and avoid local tariffs.

“It’s a huge, huge opportunity for Lincoln because we see China as Ground Zero for Lincoln given the size of the market and how well the brand has been received,” seekingalpha.com quoted Ford CFO Bob Shanks as saying.

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He had spoken at the recent Goldman Sachs Industrials Conference 2019 in New York City.

While Ford brand sales have slumped in China, demand for Lincoln vehicles has held up, the report said.

China last week announced it would increase tariffs imposed on about US$60bn of US goods in retaliation for president Donald Trump’s latest escalation of the trade war, though auto parts remained exempt.

The tariffs would take effect on 1 June, according to the China ministry of finance website.

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The Trump administration had earlier announced an extra 25% tariff on thousands of Chinese products worth about $200bn and followed up with a plan to levy a 25% additional tariff on all remaining imports from China.

Tariffs were imposed at 5%-25% levels but auto parts, initially on the list and exempted since December, were still excluded.

The Chinese ministry said in another statement importers and associations could apply for exemptions for goods on the lists which would lift the punitive tariffs for a year while companies could also receive a rebate of already paid tariffs.

“China’s tariff move is in response to the US unilateralism and trade protectionism,” the ministry said.

Later in the week Trump officially set a six-month deadline to negotiate national security issues with respect to imported automobiles and certain automobile parts from the European Union, Japan and any other country the US Trade Representative deemed appropriate.

Relief as Trump holds fire on auto tariffs – COMMENT