Ford Motor Company CEO Jim Hackett said in a Bloomberg Television interview that he hopes the Trump administration works quickly to resolve trade disputes with other countries, as the tariffs on imported steel and aluminum imposed earlier this year have already cost Ford dearly.
“The metals tariffs took about $1 billion in profit from us – and the irony is we source most of that in the U.S. today anyways,” Jim Hackett said during the interview. “If it goes on longer, there will be more damage.”
Hackett’s claim that $1 billion in profits has been snatched away as a result of the metals tariffs put in place by the Trump administration align with an estimate published by a Goldman Sachs analyst back in March. The analyst put the total annual damage as a result of the import duties at $1 billion each for Ford and General Motors, while a JPMorgan analyst later came out and said that the impact likely wouldn’t be anywhere near that dire.
President Trump enacted the tariffs by invoking a 1962 law that grants the U.S. President authority to impose new import duties in the event that some import poses a threat to national security. The taxes were originally intended to impact steel and aluminum imports from China, but the Trump administration allowed exemptions granted to the likes of Canada and the United Nations to lapse without extending them.
“Business, you hear them talk about, they count on certainty,” Jim Hackett said, according to Bloomberg. “In this case, we’re kind of frozen. A lot of businesses aren’t sure and that’s not good.”
But the Ford CEO indicated that there’s reason to be hopeful, as he believes “there’s going to be news about [a NAFTA replacement] being closed soon, [and] Europe and North America are making tremendous progress as it relates to vehicle discussions.”
Ford posted an impressive $7.6 billion in net income for 2017, but per Bloomberg, analysts have forecast a 29-percent drop in profits for this year, causing Ford’s share value to plummet to just over $9, from a year-to-date peak of $13.48 back in January.