Ford CEO Jim Farley today pushed back on the idea that President Trump's plan to impose a 25% tariff on goods from Canada and Mexico will be good for the US economy.
"Let's be real honest, long term, a 25% tariff across the Mexico and Canadian border would blow a hole in the US industry that we have never seen," Farley said at the Wolfe Research Auto, Auto Tech, and Semiconductor Conference in New York.
The move, currently set to go into effect on March 4, would handicap US companies like Ford, while giving foreign automakers "one of the biggest windfalls ever." That mostly applies to South Korean, Japanese, and European brands that would not be subject to tariffs on the roughly 1.5 to 2 million vehicles they import into the US, Farley says. (Think Kia, Honda, and BMW.)
US automakers are already struggling to compete globally with their electric vehicle lineups. Ford has been open about its inability to match Chinese companies like BYD, which are already producing low-cost EVs at high volumes. Ford, meanwhile, has not released a new EV since the F-150 Lightning in 2022, and says it has to focus on hybrids until it can make a more affordable fully electric vehicle.
Trump has also frozen federal funding for a nationwide charging network. Transportation Secretary Sean Duffy says electric vehicles are increasing the average price of a car for US consumers. However, these tariffs could have a far more severe effect, and make it more difficult for US car companies to scale up their EV businesses.
"There's a global street fight in the auto industry right now between electrification, zone electric architectures, and...the emergence of the Chinese as a global force in our industry," Farley says. "President Trump has talked a lot about making our US auto industry stronger, bringing more production here. [If] this administration can achieve that, it would be one of the most signature accomplishments. So far what we're seeing is a lot of cost, a lot of chaos."
