As automakers brace for new tariffs on imports from Mexico and Canada, Ford’s CEO Jim Farley is warning the extra costs would be “devastating.” Farley said the additional tariffs, which could go into effect as soon as March 1, would be a “blow a hole” in the US auto industry.
Ford CEO says Trump tariffs would be devastating for the US
After Trump imposed an extra 25% tariff on imports from Canada and Mexico earlier this month, Ford’s CEO is speaking out, saying the impacts will be devastating, not only for automakers but also for buyers.
Although the tariffs are on hold for now, Farley said the threats are already creating “chaos” and “a lot of costs” for the US auto industry.
During a Wolfe Research investment conference on Tuesday, Ford’s CEO explained that “President Trump has talked a lot about making our US auto industry stronger, bringing more production here, more innovation to the US, and if this administration can achieve that, it would be one of the most signature accomplishments.”
So far, however, “what we’re seeing is a lot of cost and a lot of chaos,” Farley added. Ford is looking for ways to build up inventory in the US to soften the blow of Trump’s tariffs.
Although Ford is less exposed than rivals like GM and Jeep maker Stellantis, it is still expected to take a hit from suppliers that will be impacted, executives explained at the event.
On the company’s fourth-quarter earnings call, Farley said, “There’s no question that tariffs at 25% level from Canada and Mexico, if they’re protracted, would have a huge impact on our industry, with billions of dollars of industry profits wiped out and an adverse effect on the US jobs.”
Electrek’s Take
The US auto industry is already falling behind China, which Farley called “a major force in our industry.” China is by far the world’s largest EV market, but domestic leaders, like BYD, are quickly expanding overseas, stealing market share from legacy automakers.
BYD sold over 4.25 million vehicles last year. For the first time, BYD sold more vehicles than Honda and Nissan, which are now scrambling to keep up.
Trump’s decision to withdraw federal support for electric vehicles and impose tariffs on our biggest trade partners will only put the US further behind.
Ford, GM, and several others have already pushed back new EV launches and other projects in anticipation, opening the door for overseas automakers to take advantage.
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