Over the past several weeks, much ado has been made about tariffs either proposed by the Trump administration for a variety of imported goods – including automobiles and associated parts and raw materials – as well as tariffs that have actually taken effect. Thus far, aside from an additional 10 percent tariff placed on goods coming from China, Trump has also slapped imported steel and aluminum with a 25 percent levy, which figures to impact automakers in different ways. Turns out, Ford isn’t really feeling the effects of those specific tariffs, however.
“So in steel, we get 90 percent of that from the United States. We get about 10 percent from Canada and nothing meaningful from Mexico. Aluminum also is not that impacted for us,” Ford CFO Sherry House revealed during the recent Wolfe Research Auto, Auto Tech, and Semiconductor Conference.
While Ford isn’t impacted in a major way by these aluminum and steel tariffs, it could certainly face larger financial penalties in the near future. Trump proposed a 25 percent tariff for Mexico and Canada even prior to taking office in January, but has thus far delayed those levies on two occasions – just last week, the president gave automakers a 30-day reprieve, in fact. It’s unclear if Ford will pass these costs down to consumers if the tariffs do eventually apply to its imported models – which include the Ford Maverick, Ford Bronco Sport, and Ford Mustang Mach-E – but the lobby group Alliance for Automotive Innovation seems to believe that it will.
Ford CEO Jim Farley originally called for more comprehensive tariffs and stated that these actions are causing “chaos” in the industry – adding that Mexico tariffs, specifically, could “blow a hole in the U.S. industry that we’ve never seen.” However, the exec later paid a visit to Capitol Hill to discuss these matters with the Trump administration. Following that visit, Farley voiced his support for Trump’s plan to place tariffs on all imported automobiles. Some Ford factory workers remain concerned about the potential impacts these levies may have on their jobs, though it’s possible that the tariffs may actually help boost American automotive production, at least, in the long run by prompting automakers to shift more of it to the U.S. to avoid the extra costs.
Comments
Exact on steel, but this article is expressively quiet on aluminum !… Ask Mr Foote why!
Prediction: F150s out of production in less than 2 weeks, maybe even less. Check the financial markets reactions
“Aluminum also is not that impacted for us” – straight from Ford CFO Sherry House and in the article itself.
Prices on domestically sourced steel and aluminum will rise since the competition will be more expensive. Domestic makers will gain a little more profit, possibly, and Ford will pay more. Also Trump just promised higher tariffs on Canadian built vehicles; he claims he wants to put all Canadian car factories out of business (even though they belong to US companies).