Back in early April, U.S. President Donald Trump imposed tariffs of 25 percent on imported automobiles, with certain parts following suit. Since then, Trump has worked to negotiate deals with various countries, reaching trade agreements with places like the UK, as well as a temporary reduction on goods coming from China. Regardless, Ford CEO Jim Farley – who has voiced support for certain tariffs on more than one occasion as of late – still expects some tariffs to remain in place for a while, it seems.
In a recent interview on CNBC’s Squawk Box, Farley was asked if he expects these tariffs to remain in place permanently. “We do, at least for the next three years,” Farley said. “We think it’s a significant issue for the company. The good news is we build 80 percent of our vehicles in the U.S., so we’re the least affected and the most able to absorb them. But they are significant for our company and we’re doing everything we can to mitigate them. There’s a lot of things that are still unclear, and that’s why we suspended guidance.”
Farley also admitted that the Trump administration has asked automakers to move production to the U.S., stating “that’s the administration’s goals.” When asked specifically if the automaker is considering moving Ford Maverick production from Mexico to the U.S., Farley said “look, anything’s on the table – we’re building two new plants in the U.S. as we speak. The Maverick is our fastest turning vehicle so far, and we’re going to look at everything.” The exec did add that the numbers would have to make sense, and stated that every vehicle the automaker sells “can’t be $50,000.”
Farley also added that modifying supply chains to source all of the parts the company needs from the U.S. is going to be a difficult and complicated task, noting that the Trump administration is indeed listening to feedback on that topic. He added that last week’s executive order “helped a lot” in that regard, giving automakers a bit of a reprieve on imported parts, too.
Comments
It’s interesting to read from several different sources that particularly small sub-assemblies that are part of larger main assemblies of which many are built overseas due to inexpensive labor costs, will more than likely be built robotically when are assimilated back into the U.S. So, the only manufacturing related jobs that will be realized, are the folks building and setting up the robots…not more people doing these menial tasks.
Better than nothing. Plus the operations moved to the US will provide a tax base to the respective community.
I don’t know about the 3 years because, by then, Americans will be in a deep recession and about to eliminate Trump and his cronies. But, that notwithstanding, what isn’t clear yet is how the tariffs will impact every single model of every automaker. Some are expected to spread the wealth around, even to models made in America. What will Ford do if his assertion is correct?
Wasn’t Farley who said Ford was going to go all in on EVs and that EVs were going to take over the market
When is he going to build some in the USA? Puma Gen-E?
I assume the two new plants he’s referring to are Blue oval City and the plant in Marshall, Michigan? I wonder if Ford is considering turning the Marshall plant over it assembly?