Ford's CEO Alerts That Trump's Tariffs Are Creating 'Chaos' | Carscoops

      Ford CEO Jim Farley cautions that the implementation of tariffs will increase costs and create turmoil in the American automotive sector.

      Farley highlights the disruption but believes the President's intention is to bolster the industry. Analysts suggest Ford is less susceptible to the repercussions of tariffs compared to competitors GM and Stellantis.

      It is evident that Jim Farley, CEO of Ford, does not support President Donald Trump’s recent tariff proposals. He has previously warned against restricting trade with China, asserting it would be detrimental to the American auto industry. Currently, Farley’s concerns revolve around the proposed tariffs on imports from Mexico and Canada.

      In an interview with Reuters, Farley expressed his belief that President Trump aims to fortify the US auto industry, while emphasizing that the existing tariff direction has resulted in “a lot of cost and a lot of chaos.”

      To prepare, Ford is exploring strategies to increase inventory prior to the implementation of the proposed tariffs. President Trump’s 25 percent tariff on imports from Mexico and Canada has been postponed until March, offering the industry some time to adjust. However, many US automakers now face a situation where their more affordable models could incur higher import taxes.

      In 2024, approximately 2.19 million vehicles sold in the US were imported from Mexico, with 717,000 units produced in Canada. Despite being an American brand, Ford assembles several significant models, including the Bronco Sport, Maverick, and Mustang Mach-E, in Mexico.

      General Motors, Ford’s competitor, encounters similar challenges but has devised its own strategies to lessen the impact. Some of GM’s popular models are imported from countries not affected by the tariff proposals, such as the Buick Encore GX and Envista from South Korea.

      Ford has stated that the recent 25 percent tariff on steel and aluminum will not significantly impact its operations since most of these materials are sourced locally. However, some of its suppliers may be affected, leading Ford to bear some of the increased expenses.

      According to CNBC, Farley remarked, “President Trump has spoken extensively about strengthening our U.S. auto industry, increasing domestic production, and fostering innovation in the U.S. If this administration can accomplish that, it would be a remarkable achievement. However, so far, we are encountering substantial costs and considerable chaos.”

      The potential implementation of the new tariff structure on goods from Mexico and Canada is still uncertain. Analysts forecast that Ford is less vulnerable to external disturbances compared to GM and Stellantis. Nevertheless, with shares declining on Tuesday, it is evident that the uncertainty is troubling for Ford.