FLAT ROCK, Mich. — The auto industry's relationship with President-elect Donald Trump took a dramatic turn Tuesday as Ford decided to shift investment dollars targeted for Mexico to the U.S., while Trump threatened General Motors with a tax on some imported cars.

Ford is canceling plans to build a new $1.6 billion factory in San Luis Potosi, Mexico, and will instead invest some of that money in a U.S. factory that will build new electric and autonomous vehicles.

Ford said last spring it would move production of the Ford Focus small car to the new plant from Michigan. Trump repeatedly criticized the plan, and Ford was among the companies he threatened to hit with a 35 percent tariff on products made in Mexico and exported to the U.S.

Ford CEO Mark Fields said Tuesday that market forces dictated Ford's decision not to build the San Luis Potosi plant. Low gas prices and low interest rates have been hammering small-car sales.

Ford will still move production of the Focus to Mexico, but it will go to an existing plant in Hermosillo that makes midsize cars. Ford will hire around 200 workers in Hermosillo to expand production there. The Wayne, Mich., plant that currently makes the Focus will get two new products next year, preserving jobs at the facility.

Fields said Ford will invest $700 million in the Flat Rock, Mich., plant. It will also hire around 700 workers starting in 2018.