Cars and Drivers

Ford Says Tariffs Will "Blow A Hole" In US Car Industry

Douglas A. McIntyre

Published: February 23, 2025 10:07 am

Ford Motor (NYSE: F) CEO Jim Farley is worried about 25% tariffs the Trump Administration might put on imports from Mexico and Canada. Over 20% of the cars sold in the US are from one of the countries.

According to the AP, “In 2023, the United States imported $69 billion worth of cars and light trucks from Mexico – more than any other country — and $37 billion from Canada. Another $78 billion in auto parts came from Mexico and $20 billion from Canada.” Ford is particularly vulnerable, Engines from the F-series pick up come from Canada. Over a third of Ford’s US sales are from the F-series.

Ford’s stock is down 24% in the last year, against an increase of 18% in the S&P 500. Part of that is poor financial performance. Ford’s unit sales have been good. However, it is struggling in China, the world’s largest car market. It will make money there, but the prospects are challenging, particularly because of the success of local EV manufacturers.

Ford has also had warranty charge issues, which hurt earnings by hundreds of millions of dollars last year. Recently, 240,000 Lincolns and Ford SUVs were recalled because of concern about seat belts.

Ford has also spent billions of dollars on EVs. It continues to lose money in the sectors. EV are less than 10% of its US new car sales. It owns less than 10% of the US EV new car market.

However, none of these missteps is the current challenge. Ellen Hughes-Cromwick was chief economist at Ford before she went to serve in the Obama Commerce Department. She told Bloomberg “I think those tariffs would be absolutely crippling, and I’m not exaggerating.”