Ford sees $1.9 billion hit from Trump tariffs in 2025, suspends full-year forecast
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Ford Motor will not increase the price of its vehicles until it sees how rivals respond to added US tariff costs.
PHOTO: REUTERS
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Southfield, Michigan – Ford Motor suspended its full-year financial guidance and said US President Donald Trump’s auto tariffs
The automaker expects the duties to reduce adjusted earnings before interest and taxes (Ebit) by about US$1.5 billion (S$1.9 billion) on a net basis in 2025, it said while reporting a first-quarter profit that beat expectations.
The company’s total tariff impact is about US$2.5 billion, US$1 billion of which the company expects to offset through actions such as using so-called bonded transportation to shield parts from tariffs as they cross international borders, Ford chief financial officer Sherry House told reporters.
Ford cited seven factors in withdrawing its earlier forecast for as much as US$8.5 billion in adjusted Ebit in 2025, including potential “industry-wide supply chain disruption” tied to Mr Trump’s tariffs and the risk that duties may increase in the future.
The company plans to provide an updated outlook when it reports second-quarter earnings.
Ford is the latest automaker to point to the steep costs of Mr Trump’s back-and-forth campaign to reshape global trade routes.
The US President has said 25 per cent tariffs imposed on imported vehicles and parts are needed to bring more production and jobs to America. Automakers have warned that broad, lasting tariffs will increase costs, jeopardise employment and potentially increase new car prices that are already nearing US$50,000 on average.
Ford chief executive Jim Farley last week said the company will not increase the price of its vehicles until it sees how rivals respond to added tariff costs.
The US$1.5 billion hit that Ford now expects comes despite relief granted to automakers last week. Mr Trump spared imports subject to the auto tariffs from paying additional duties targeting other goods, such as steel and aluminium.
The White House also will phase in tariffs on auto parts over two years to give companies time to move production to the US.
Ford’s tariff exposure is less than its Detroit competitors because the automaker domestically produces 80 per cent of the cars it sells in the US.
General Motors last week slashed its profit outlook for the year and said its tariff exposure was as much as US$5 billion. GM on May 2 cut jobs and production at a Canadian plant producing Chevrolet Silverado pickups as it moves production of those models to a plant in Indiana.
Ford has struggled with higher warranty costs and other expenses, including losses on electrical vehicles it has said may reach US$5.5 billion in 2025. The cost of launching redesigned versions of its big Expedition and Lincoln Navigator sport utility vehicles in the first quarter also sapped profits.
Ford’s first-quarter adjusted profit was 14 US cents a share, better than the four-cent average loss expected by analysts. BLOOMBERG
