Automaker Ford Motor Co.’s (NYSE:F) CEO, Jim Farley, weighed in on President Donald Trump’s latest tariff measures affecting heavy-duty trucks, warning of significant financial impacts for the U.S. automotive giant, as well as the broader industry.
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The New Tariffs Are ‘A Really Big Deal’
Farley described the new tariffs announced last week as “a really big deal for our country and for Ford,” while noting that even though the company manufactures its heavy-duty trucks domestically, it relies heavily on foreign-made parts. “There are a lot of parts that we don’t make in the US. Those are getting tariff 25%, 70%,” he said.
He said that the tariffs now represent “a $2 billion headwind for Ford,” which he says, “really restricts our future investment.”
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Despite the challenges, Farley emphasized Ford’s ongoing dialogue with the administration. “They’ve been incredibly open on solutioning around that. And I’m very optimistic we’ll find a solution on the tariff. But a lot more work to do,” he said.
Farley also pushed back on the idea that protectionism would benefit the U.S. auto industry long term. “We are not going to be a vibrant company or country if we just build a huge wall around the United States,” he said.
Instead, he advocated for strategic innovation to meet foreign competition head-on, highlighting the importance of “outinnovating” competitors such as the Chinese EV giant BYD Company (OTC:BYDDY).
Farley concluded by stressing the need for flexibility in global supply chains. “We need to be able to import them, you know, in a way without huge tariffs to make our vehicles more affordable that we do make here,” he said.
Tesla Isn’t The Threat, Chinese EVs Are
Earlier this month, Farley said that he wasn’t worried about competing against Tesla Inc. (NASDAQ:TSLA) as much as he was about Chinese automakers, calling them a “700-pound gorilla” in the electric vehicle industry, because they offer “great innovation at a low cost.”
“There’s no real competition from Tesla, GM (NYSE:GM), or Ford with what we’ve seen from China. It is completely dominating the EV landscape globally and more and more outside of China,” he said.
Shares of Ford were down 1.08% on Tuesday, closing at $11.96, and it is flat in overnight trade. The stock scores high on Momentum and Value in Benzinga’s Edge Stock Rankings, with a favorable price trend in the short, medium and long terms. Click here for more insights on the stock, its peers and the broader industry.
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