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President Donald Trump’s tariffs are adding “a lot of cost and a lot of chaos” to the auto industry, Ford (F+0.05%) CEO Jim Farley said Tuesday.
Speaking at the Wolfe Research conference, Farley said, “Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation in the U.S., and if his administration can achieve that, it would be one of … the most signature accomplishments,” according to CNBC.
Instead, Farley said the industry is dealing “the cost of chaos” thanks to Trump’s new tariffs of 25% on imported steel and aluminum and his threats to impose 25% tariffs on Canada and Mexico, which he reneged on after making a temporary deal with the two countries.
Farley said that while much of the company’s steel comes from the U.S., Ford relies on international suppliers for some parts. He said tariffs on Mexico have the potential to be “devastating” if enacted and would “blow a hole in the U.S. industry that we’ve never seen.”
The Ford boss is headed to Washington this week for the second time since the inauguration to try to explain to politicians how bad tariffs could be for Ford.
Farley has previously told investors the tariffs would “also mean higher prices for customers” and “have a huge impact on our industry with billions of dollars of industry profits wiped out and adverse effect on the U.S.”
Trump’s previous steel tariffs, enacted during his first term as president, had a huge impact on Ford and other U.S. automakers.
“From Ford’s perspective, the metals tariffs took about $1 billion in profit from us,” the automaker’s then-CEO, James Hackett, said in September 2018. “If it goes on any longer, it will do more damage.”
The Biden administration replaced some steel and aluminum tariffs with tariff rate quota systems, which limited how much companies would be affected.
Additional reporting by William Gavin.