Ford to source 50% of auto chips from US

WASHINGTON, D.C. (CNN) — Ford will begin sourcing 50% of its automotive processors made in the United States from the U.S. in the next three years to increase U.S. employment and ensure long-term stability in chip production, the company announced Tuesday.

The new suppliers will enable Ford to source a greater volume of chips and in turn, more quickly respond to market fluctuations, the company said.

“By moving our processor manufacture to the U.S., we’re going to keep a significant amount of this work in the U.S. and grow U.S. jobs,” Joseph Hinrichs, president of the Americas and chief operating officer of Ford, said in a statement. “As we begin this program, Ford will procure approximately 60% of all processors from the U.S. in the coming years.”

The announcement comes in the wake of President Donald Trump’s criticisms about how the United States is treated by China for the rate of its military contributions to international programs, such as the battle against the Islamic State. The administration has threatened to penalize China with steep tariffs on Chinese imports.

President Trump called for the purchase of $200 billion worth of goods from the United States to help achieve his goal of having U.S. military purchases from foreign countries remain at 30% instead of the current level of 80%.

Chip makers have also been reliant on free trade, but Trump has called on the Federal Reserve, which is charged with keeping inflation in check, to slow down interest rates.

CNN has reached out to the White House for comment on the announcement.

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