President Trump's newest round of tariffs is already upending the automotive industry, according to the CEO of Ford Motor Company.
Trump signed an executive order on Monday that puts a 25% tariff on all foreign steel and aluminum imports. It came a week after he enacted a 10% tariff on Chinese goods and postponed 25% tariffs on imports from Canada and Mexico until at least March 1.
Ford CEO Jim Farley said Tuesday that the tariffs, whether enacted or threatened, would be “devastating” for automakers, according to Bloomberg, and a “windfall” for Asian and European competitors who wouldn’t have to contend with the increased cost of production.
“President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here,” Farley said at a Wolfe Research automotive conference in New York. But, he added, “so far, what we’re seeing is a lot of cost, a lot of chaos.”
CNN reported the steel and aluminum tariffs are largely aimed at China. “This is a big deal — making America rich again,” Trump said in announcing the tariffs, per CNN.
Farley asked the Trump administration last week to take a “comprehensive” look at all countries, according to CNBC. Farley noted that Toyota Motor and Hyundai Motor import hundreds of thousands of vehicles from Japan and South Korea every year that face practically no tariffs compared to the ones Trump has threatened on Canada and Mexico.
A report from the Brookings Institution found that a 25% tariff would lead to more than 177,000 job losses in America, with exports of motor vehicles falling by 25% to Canada and 23% to Mexico.
General Motors believes it can mitigate up to 50% of potential North American tariffs, CNBC reported.
CEO Mary Barra said Tuesday that the Detroit automaker has contingency plans if tariffs are levied on auto parts and vehicles coming from Canada and Mexico. If the tariffs are prolonged, the company could shift production or parts or vehicles, its leaders said.
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