- Ford CEO Farley warns tariffs will raise costs on popular models like the Bronco Sport.
- Farley acknowledges chaos but believes the President’s aim is to strengthen the industry.
- Analysts predict Ford is less vulnerable to tariff fallout than rivals GM and Stellantis.
It’s safe to say that Ford’s CEO, Jim Farley, isn’t a big fan of President Donald Trump’s round of tariff proposals. The Blue Oval’s chief has previously warned that cutting off China would be a misstep for the American automotive industry. Now, Farley’s worries center on the proposed tariffs on Mexican and Canadian imports.
Speaking to Reuters, the CEO says he believes that President Trump’s aim is to strengthen the US auto industry, but made it clear that the current tariff trajectory had introduced “a lot of cost and a lot of chaos” to the picture.
Stockpile While You Can
Ford is looking into ways to build inventory before the proposed tariffs are introduced. So far, President Trump’s 25 percent tariff on goods from Mexico and Canada has been delayed until March, giving the industry a little breathing room. But many US automakers must now prepare for a reality where some of their cheapest models face greater taxes on import.
Read: Ford CEO Slams Trump’s Unfair Tariffs That Benefit Foreign Brands
In 2024, some 2.19 million vehicles sold in the US were imported from Mexico, with 717,000 cars produced in Canada. Even though Ford is an American brand, some of its key models, such as the Bronco Sport, Maverick, and Mustang Mach-E, are built south of the border.
Ford’s rival, General Motors, faces similar problems, but has its own plans to mitigate the impact. Some of GM’s home-name models are also imported from other nations that haven’t been the target of the tariff crusade, such as the South Korean-made Buick Encore GX and Envista.
Cost And Chaos
Ford says that the recently raised 25 percent tariff on steel and aluminum won’t hurt its business too much, as most of these metals are locally sourced to begin with. However, the same cannot be said for some of the company’s suppliers, with Ford expecting to absorb some of the increased costs that will result.
According to CNBC, Ford CEO Jim Farley told reporters, “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. So far, what we’re seeing is a lot of cost and a lot of chaos.”
It remains to be seen whether the new tariff structure for Mexican and Canadian goods will come in to effect. Analysts predict that Ford is less exposed to external shocks than its main competitors in the form of GM and Stellantis. But with shares down on Tuesday, it’s clear that the uncertainty is causing some headaches for the Blue Oval.
