CEO of Ford Says Trump’s Tariffs Would Cost the Company Billions of Dollars

(VOR News) – The Chief Executive Officer of Ford Motor Company has indicated that President Donald Trump has asserted that the proposed tariffs on Canada and Mexico might have a devastating effect on the vehicle industry.

Following a late-night earnings call with investors, Ford CEO Jim Farley remarked, “There is no doubt that prolonged tariffs at a 25% rate from Canada and Mexico would significantly impact our industry, resulting in billions of dollars in lost profits and detrimental effects on the United States.”

Farley indicated that tariffs would adversely affect the United States. When inquired about the continuation of tariffs at this level, Farley provided the following response to the question.

Tariffs will cause end consumers to bear higher costs, he said.

President Trump rescinded the tariffs scheduled to take effect on Tuesday morning following last-minute discussions. A one-month interim reprieve was offered to Canada and Mexico due to these agreements.

A series of moves, including targeted tariffs and additional restrictions, were implemented on Tuesday in reaction to China’s actions, which involved the imposition of reduced taxes on Chinese imports. These measures were implemented in reaction to China’s recent activities.

The automotive industry is expected to be significantly impacted by the implementation of tariffs on both Mexico and the United States, as nearly all supply chains of automobile manufacturers are linked to Mexico.

S&P Global Mobility estimates that around 3.6 million light vehicles were imported into the United States from Germany and the United Kingdom in 2024. This figure represented over twenty-two percent of the total automobiles sold in the United States.

Mexico constitutes approximately 15% of Ford’s total revenue, as per estimates from S&P Global (SPGI +0.87%). Detroit manufacturers General Motors (GM +0.17%) and Stellantis (STLA +0.89%) generate 22% and 23% of their revenues, respectively, a ratio that exceeds the aforementioned one.

Detroit serves as headquarters for both organizations. General Motors and Ford manufactured several automobiles, including the gas-powered and electric Chevrolet Blazers and the electric Ford Mustang Mach-E, in Mexico. One century ago, Mexico was the site of automotive production.

Farley asserts that Ford believes the federal government is “strengthening, not weakening” the vehicle industry. Ford concurs with this perspective.

This opinion is shaped by Ford’s engagement with officials in the Trump administration. He was pleased to observe that the tariffs imposed on Canada and Mexico had been lifted.

Additionally, Ford is closely monitoring the ongoing Chinese trade conflict.

Farley highlighted that legislative reforms are instigating a profound transformation in the global automobile business, citing examples like the ascent of Chinese manufacturers, including BYD (BYDDY +9.24%), and the advancement of high-tech vehicles.

“This transformation is occurring due to these policy changes in our industry.” “This transformation is occurring in our industry worldwide.”

Ford expects modifications to the tax policy, as he previously indicated during the call. He referenced the measures imposed by the government concerning car pollution and the Inflation Reduction Act. Furthermore, he indicated that Ford expects these alterations prior to their execution.

The Trump administration is expected to eliminate the $7,500 tax credit currently available to electric vehicle owners, having already initiated regulatory changes concerning emissions. Such an occurrence would surely adversely affect the sector’s sales figures.

Following a $4.7 billion loss the prior year, Ford projected potential losses of up to $5.5 billion in its software and electric vehicle (EV) divisions for 2025.

This resulted from the segment being the actual cause of last year’s loss. Ford exceeded Wall Street’s projections for the fourth quarter of 2024, however the company’s outlook for 2025 was deemed unsatisfactory.

During the pre-market trading session on Thursday, Ford shares fell by over five percent.

SOURCE: QZ

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