The reason? To pay only a 2.5% duty imposed on passenger vehicles imported from Europe rather than the 25% duty the US imposed on trucks.
But in 2013 US Customs and Border Protection changed its ruling, saying that those vehicles should have been taxed at the 25% rate all along. Ford fought the decision in court, but lost the final legal skirmish last year when the US Supreme Court declined to hear the case. And the automaker paid the back tariffs owed on those past imports.
Ford said it intends to fight the penalty, as well as additional duties of $181 million that it said US Customs is seeking for those past imports.
“The Transit Connect program was designed and executed to comply with long-standing tariff rules,” Ford said in a statement about the case. “We will rightly continue to vigorously defend Ford’s actions here and contest any [additional] duties and penalty. The government’s argument sharply contradicted all precedents, including many of CBP’s own rulings.”
Ford still builds the Transit Connect vans in Europe — in Spain rather than Turkey — and ships them to the United States, where it pays the duty. One upside is that it no longer has to pay for seats and windows that are never used or the cost of converting the vans.