Ford Faces Uncertainty Amid Tariff Changes and EV Policy Shifts
Ford is navigating significant challenges as the Trump administration’s tariff policies and stance on electric vehicles (EVs) introduce uncertainty for the automaker. CEO Jim Farley highlighted potential risks to both costs and jobs during a recent financial conference.
Jim Farley expressed concerns over the Trump administration’s approach, stating that tariff threats and negative sentiments toward EVs are causing “a lot of cost and a lot of chaos” for Ford. He emphasized that job security could be jeopardized if incentives for EVs are withdrawn.
The administration’s focus on strengthening U.S. manufacturing has been overshadowed by “policy uncertainty,” according to Farley. This uncertainty stems from continually changing tariff plans and unclear intentions regarding the rollback of EV tax credits.
Farley criticized the initial proposal to impose 25% tariffs on imports from Mexico and Canada, describing it as disastrous for American companies operating in the region. He argued that such tariffs would unfairly benefit European and Asian automakers that also export to the U.S.
Last week, the tariffs were temporarily suspended for 30 days after Mexico and Canada made concessions. However, the Trump administration has not ruled out their reinstatement and has announced plans to enact 25% tariffs on steel and aluminum.
Farley noted that while Ford sources most of these metals from U.S. suppliers, many of the company’s suppliers have international origins. He cautioned that tariffs or even rumors of tariffs could drive up prices: “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.
Discussing broader industry goals, Farley mentioned, “President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation,” referring to these initiatives as potential “signature accomplishments.” However, he contrasted this with the current situation, stating, “so far, what we’re seeing is a lot of costs and chaos.”
The CEO also raised concerns about the Trump administration’s plans regarding the Biden administration’s Inflation Reduction Act (IRA), which provides tax incentives for EV purchases and the construction of EV factories. An executive order issued on Trump’s first day in office indicated a possible elimination of these EV tax credits.
Farley highlighted Ford’s significant investments in states like Ohio, Michigan, Kentucky, and Tennessee, noting that the company has already “sunk capital” into these projects. He warned, “Many of those jobs will be at risk if the IRA is repealed or if big parts of it is repealed.”
