Tariffs and Automotive Industry: Ford CEO Raises Concerns

Ford CEO Jim Farley has expressed concerns over the potential impact of prolonged tariffs on the automotive industry. During the company's Q4 earnings call, Farley emphasized the need for a comprehensive tariff policy that addresses imports from all countries.

Call for Fairness

Farley pointed out that while Ford and other automakers face tariffs on imports from Mexico and Canada, companies like Hyundai-Kia and Toyota import significant numbers of vehicles into the US without tariffs. He questioned the fairness of this arrangement, arguing that all import competitors should be subject to the same tariffs.

Impact on Industry

Farley predicted that sustained tariffs on imports from Canada and Mexico would have a "devastating impact" on the industry. He warned that billions in profits could be lost due to supply chain disruptions and increased costs.

Toyota and Hyundai Import Tariffs

While Toyota does not pay any incremental tariffs on vehicles imported from Japan, it pays a small tariff of 2.5%. Hyundai-Kia, on the other hand, benefits from a free-trade agreement between the US and South Korea, meaning no tariffs are collected on imported vehicles from South Korea.

Ford's Position

Farley maintained that Ford is better positioned than its competitors due to its focus on US production and a large UAW labor force. However, the automaker is facing other challenges, including pricing pressures, rising costs, and concerns about reduced demand.

Outlook

Ford's forecast for 2025 profits missed analysts' expectations, raising concerns about market conditions. The company indicated that its forecast did not factor in the effects of a prolonged trade war.