Ford Motor Company has announced it expects to incur approximately $2 billion in tariff-related costs this year, citing sustained duties under former President Donald Trump’s trade policies. The automotive giant revealed it had already paid $800 million in additional duties in the second quarter ending June, highlighting the prolonged financial toll of protectionist measures introduced in recent years.
Ford’s Chief Financial Officer Sherry House attributed the revised tariff forecast to elevated levies on imports from Mexico and Canada key manufacturing locations for the company that have remained higher for longer than anticipated. She also pointed to the continued impact of U.S. tariffs on imported steel and aluminum, essential materials in automobile production.
Despite the significant cost, Ford noted that its exposure to tariffs is somewhat mitigated compared to rivals, due to its extensive U.S.-based manufacturing operations. Nevertheless, the financial strain adds to other challenges facing the company, including losses from cutting back on an electric vehicle development program.
Ford joins a growing list of American and global carmakers grappling with the fallout from U.S. trade policies. General Motors recently stated it had absorbed over $1 billion in tariff-related costs, while Germany’s Volkswagen estimated a $1.5 billion hit.
Chief Executive Jim Farley confirmed that Ford is actively engaging with the White House in an effort to reduce tariffs, especially those impacting vehicle parts. “We see there’s a lot of upside depending on how the negotiation goes with the administration,” Farley said, expressing cautious optimism about the ongoing discussions.
The tariffs, a hallmark of Trump’s economic agenda, were originally imposed to push companies to relocate manufacturing to the United States. They include sweeping duties on a wide range of goods, with the automotive sector particularly affected.
Following the earnings release, Ford’s shares dipped about 1.5% in after-hours trading in New York on Wednesday, reflecting investor concern over rising costs and economic uncertainty.
As trade negotiations continue and the 2024 election cycle unfolds, companies like Ford remain in limbo caught between global supply chain realities and evolving political priorities in Washington.
