US trade representative 'troubled' by Ford's China move

US Trade Representative Robert Lighthizer said on Thursday that he would support taking action against US automaker Ford's decision to move some production to China if the shift were because of "non-economic reasons".

Lighthizer said he wanted to know more about the incentives for the move. "If it happened for reasons that are non-economic reasons, then I think the administration should take action," he said.

Lighthizer, who was appearing before a panel of US senators, didn't give details on what sort of action the administration of US President Donald Trump might take. But he made clear he wasn't enthused about Ford Motor Co's announcement on Tuesday that it will move some production of its Focus small car to China and import the vehicles to the United States.

"I find that very troubling," Lighthizer said. "It doesn't necessarily make sense to me."

Trump campaigned with promises to win better terms for US workers in international trade and has accused both China and Mexico of unfairly competing with US industries.

"This is a business decision to improve profitability and deliver even better small cars to customers in a way that makes business sense," said Ford spokeswoman Kelli Felker. Felker said no US hourly workers would lose their jobs as a result of Ford's decision.

Ford said in announcing the production shift from Mexico to China, slated for mid-2019, that it's a purely financial move that will save the company $500 million in reduced tooling costs.

Wayne Morrison, a specialist in Asian trade and finance in Congressional Research Service, said the Trump's administration focus on boosting the US manufacturing sector and jobs does appear to make it sensitive to announcements by US firms of plans to shift production overseas, especially when there are plans to ship that product back to the US.

But Morrison said Lighthizer did not explain what such non-economic factors could be or what action might be considered to halt the investment China.

"At this point, Lighthizer's comments may be just political rhetoric," he said.

"But if the Trump administration does take action to interfere in such investments, it may raise concerns among US firms and foreign investors that their business decisions could come under increased scrutiny and pressure by the federal government, which could greatly complicate their bottom line," Morrison said.

Bloomberg reported on Thursday that Palo Alto, California-based Tesla Inc said it's working with the Shanghai government to explore local manufacturing in China, which would allow the electric-car maker to achieve economies of scale and bring down manufacturing, labor and shipping costs.

While most of its production is expected to remain in the US, the carmaker led by Elon Musk said it needs to establish local factories "to ensure affordability for the markets they serve".

Tesla told Bloomberg it expects to more clearly define production plans by the end of the year, according to an emailed statement to Bloomberg.

Reuters and Bloomberg contributed to this story.