The implementation of 25 percent tariffs by U.S. President Donald Trump on imported automobiles that took effect in early April have thus far left automakers scrambling to figure out how to circumvent those levies – or, at the very least, mitigate their impact as much as possible. Ford has thus far largely embraced these tariffs, using them to tout the fact that it has a larger American manufacturing footprint than most of its peers, but it has also already raised prices on three models built outside of the U.S. as well. Now, it seems as if Ford is utilizing an interesting tactic to avoid tariffs, too.
“Vehicles shipped to Canada from Mexico via the U.S. are now transported on bonded carriers, so they aren’t subject to U.S. tariffs,” Ford COO Kumar Galhotra revealed during the automaker’s Q1 2025 earnings call with investors. “We’ve done the same for parts that merely pass through the United States. We are assessing where there are near-term resourcing actions to increase U.S. content in our vehicles.”
Bonded carriers are transportation companies that have special authorization from customs authorities to move goods across international borders without the need for immediate customs clearance, which they can do via a surety bond – essentially a financial guarantee from the carrier to the government that it will comply with all customs regulations and pay required duties or taxes, enabling it to move more quickly and efficiently.
Meanwhile, tariffs have impacted automotive production in a negative way as of late amid many uncertainties, aside from prompting a few price increases. Ford also announced that it would be suspending its full-year guidance until at least its Q2 earnings call as a result of these levies. 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.
Comment
I was wondering when they would figure that out.