After imposing tariffs of 25 percent on imported automobiles in early April, U.S. President Donald Trump has engaged in a variety of talks with various countries in an effort to reach new trade deals and perhaps lower or eliminate those levies. Along with a temporary reduction of tariffs between the U.S. and China, Trump managed to strike a new deal with the United Kingdom recently, though that move didn’t exactly win over fans in the automotive sector – rather, many were hoping that a deal with Mexico and Canada would take precedence, and that includes one Ford-backed lobby group.
“The U.S. automotive industry is highly integrated with Canada and Mexico; the same is not true for the U.S. and UK,” said Governor Matt Blunt, president of the American Automotive Policy Council. “We are disappointed that the administration prioritized the UK ahead of our North American partners. Under this deal, it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts. This hurts American automakers, suppliers, and auto workers. We hope this preferential access for UK vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors.”
Ford and its Detroit Big Three counterparts are worried that their foreign rivals will gain an upper hand if Trump decides to strike a deal with places like Europe and Asia next, rather than focusing on redoing the current United States-Mexico-Canada Agreement (USMCA). Ford CEO Jim Farley previously stated that if Europe and Asia get deals while 25 percent levies remain on imports from Canada and Mexico, it would “blow a hole” in the industry and give “free rein to South Korean, Japanese and European companies that are bringing 1.5 million to 2 million vehicles into the U.S.” each year.
As a result of this tariff uncertainty, Ford opted to suspend its full-year guidance recently, and will revisit that topic as part of its Q2 financial reporting. The automaker noted that its underlying business remains “strong,” as it’s tracking within the company’s previously adjusted earnings before interest and taxes (EBIT) guidance of between $7-$8.5 billion. However, that figure also excludes any new tariff-related impacts, some of which are a bit murky at the moment. Based on what it knows right now, Ford expects that it will suffer a net adverse adjusted EBIT impact of around $1.5 billion for the entirety of 2025 due to existing tariffs.
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