The Lonski Group President John Lonski breaks down President Donald Trump’s economic agenda during an appearance on ‘Varney & Co.’
Ford CEO Jim Farley said Tuesday that President Donald Trump’s tariff push has so far brought “a lot of cost and a lot of chaos” to the auto industry despite the president’s aims to help the industry.
“President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation to the U.S., and if this administration can achieve that, it would be one of the most signature accomplishments,” Farley said at an analyst conference in Detroit.
“So far, what we’re seeing is a lot of cost and a lot of chaos,” he added.
Farley also said that if Trump’s 25% tariffs on Mexico and Canada are implemented and remain in effect for the long term, it would “blow a hole” in the U.S. auto industry, with rivals from Asia and Europe poised to benefit.
FORD EXPECTING MOUNTING EV LOSSES THIS YEAR
Ford CEO Jim Farley warned that tariffs on Mexico and Canada would “blow a hole” in the U.S. auto industry over the long term. (Emily Elconin/Bloomberg via Getty Images / Getty Images)
“Let’s be real honest: Long term, a 25% tariff across Mexico and Canada borders would blow a hole in the U.S. industry that we have never seen,” Farley said. “Frankly, it gives free rein to South Korean, Japanese and European companies that are bringing 1.5 million to 2 million vehicles into the U.S. that wouldn’t be subject to those Mexican and Canadian tariffs. It would be one of the biggest windfalls for those companies ever.”
“Meanwhile, we’re USMCA-compliant with almost all of our content, finished vehicles and components going across the borders. To have the kind of a size of tariff would be devastating,” Farley said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 9.21 | -0.03 | -0.32% |
| GM | GENERAL MOTORS CO. | 46.70 | +0.13 | +0.28% |
| STLA | STELLANTIS NV | 13.09 | +0.12 | +0.93% |
FORD EXECUTIVE BELIEVES TRUMP AND MUSK WANT TO ‘STRENGTHEN’ THE AMERICAN AUTO INDUSTRY
Ford CEO Jim Farley warned that foreign automakers would benefit if Trump’s 25% tariffs on Mexico and Canada are implemented. (Photographer: Emily Elconin/Bloomberg via Getty Images / Getty Images)
The Dearborn, Michigan-based automaker is less exposed to fallout from tariffs on Canada and Mexico than its crosstown rival General Motors or Stellantis, the parent company of brands such as Jeep and Dodge, analysts said.
That’s because more of Ford’s manufacturing base is located within the U.S. and the vehicles that it does import from outside the country tend to be less profit-rich than the products its rivals import.
FORD MUSTANG MACH-E SALES SURPASS TRADITIONAL MUSTANG
Ford execs said the company sources much of its steel and aluminum domestically, so those pending tariffs wouldn’t be as harmful to its operations. (Jeff Kowalsky / Getty Images)
Ford is considering areas in which it can build up inventory to prepare for potential 25% tariffs on Mexico and Canada, executives said Tuesday.
Those tariffs were planned to take effect in early February, but Trump delayed them until at least March after Canada and Mexico announced border security measures.
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Trump’s announcement of tariffs on steel and aluminum that are scheduled to take effect next month was discussed with Ford executives noting the company gets 90% of its steel from the U.S. and about 10% from Canada, while the company’s aluminum is also primarily sourced domestically.
Reuters contributed to this report.
