At a financial conference this Tuesday, Ford’s CEO, Jim Farley, highlighted the significant impact of the Trump administration’s trade policies, emphasizing their cost and confusion for the automaker. Farley noted that potential revocations of electric vehicle (EV) incentives could also endanger jobs.
Despite President Trump’s focus on bolstering American manufacturing, Farley pointed out the “policy uncertainty” created by the administration. This includes shifting tariff proposals and unclear plans about tax credits for EVs, causing concern within the industry.
Farley criticized Trump’s initial proposition of imposing a 25% tariff on Mexican and Canadian imports, warning it could have disastrous effects on U.S. operations. He also argued this would benefit European and Asian car manufacturers that also export to America.
Although Trump recently postponed these tariffs for 30 days after Mexico and Canada made concessions, the risk remains. The administration continues to contemplate a 25% levy on steel and aluminum.
According to Farley, Ford sources most of its steel and aluminum domestically, yet its supply chain includes international suppliers. “So that price will come through, and there may be a speculative part of the market where prices come up because tariffs are even rumored,” he explained.
“President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation,” Farley remarked, describing these potential policy achievements as “signature accomplishments.”
However, Farley revealed that the current outcomes involve significant costs and disorder.
He raised questions regarding Trump’s position on the Biden administration’s Inflation Reduction Act (IRA), which provides tax incentives for both the manufacturing of EVs and consumer purchases. A move to abolish these credits was indicated by Trump’s executive order on his first day.
Farley noted that Ford had already made substantial capital investments in several states, including Ohio, Michigan, Kentucky, and Tennessee. “Many of those jobs will be at risk if the IRA is repealed or if big parts of it is repealed,” emphasized Farley.
