Just yesterday, President Donald Trump imposed tariffs of 25 percent on imported steel and aluminum, while also threatening to increase those levies to 50 percent for Canada after it planned – and later opted not to – impose tariffs on electricity exports to the U.S. Ford CFO Sherry House later stated that this move wouldn’t impact Ford in any substantial manner, as the automaker gets around 90 percent of its steel from the United States, and with only around 10 percent coming from Canada, and added that “aluminum also is not that impacted for us.” However, another report refutes those claims.
This report comes to us from The Wall Street Journal, which claims that the Ford F-Series line of pickups – the Ford F-150 and Ford Super Duty – could be impacted by these new tariffs, given the fact that both utilize extensive amounts of aluminum in their construction. The automaker has reportedly been working to stockpile aluminum in lieu of this new tariff, and even though it gets most of that material from U.S.-based companies, its suppliers rely on Canadian smelters to provide much of the aluminum they roll. Trump remains adamant that these moves are being made in an effort to bring manufacturing back to the U.S., after much of it has exited the country in recent years.
A Ford spokesperson noted that it could take years to shift the company’s supply chain to compensate, however, though they also declined to comment on how prices might be impacted in the meantime. “While we are working to find offsets to the added cost, this will be difficult,” the spokesperson said. According to Barclays, the tariffs could increase the cost of producing vehicles by around $400 each, on average.
While Ford may or may not be impacted in a major way by these aluminum and steel tariffs, it could certainly face larger financial penalties in the near future. Trump gave automakers a 30-day reprieve on 25 percent tariffs on all goods imported from Canada and Mexico recently, after delaying them previously. 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 but 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, but Executive Chairman Bill Ford also wants them to be more predictable.
Comments
Comprehensive or targeted tariffs are the responsible way to implement. Global tariffs have many unintended consequences. We’ll see. Small and middle size businesses will feel it first, with larger multinationals able to deal with them more effectively.
Ford has raised MSRPs 40 percent over the past four years in order to make more money so absorbing $400 per vehicle would be nothing but the greed factor is high in this company.