Ford CEO Jim Farley warned that President Trump's tariffs on Canada and Mexico, as well as those on steel and aluminum, threaten the U.S. auto industry significantly. Automakers rely on a complex supply chain, with parts crossing borders multiple times, facing increased costs each time. Farley notes that these tariffs could lead to an influx of cheaper foreign vehicles, exacerbating competition. Despite attempts by companies like GM to mitigate tariff impacts, the uncertainty is causing substantial operational chaos in the industry. Executives emphasize the urgency of communicating these impacts to policymakers in Washington.
Tariffs on Mexico and Canada? Most U.S. automakers sell cars with parts that cross those borders a half-dozen times or more during the assembly process, each time potentially incurring a levy.
Let's be real honest long-term: a 25% tariff across the Mexico and Canadian border will blow a hole in the U.S. industry that we have never seen.
So far what we're seeing is a lot of costs and a lot of chaos, Farley said at a Wolfe Research conference.
We think we can mitigate 30 to 50% of tariffs without deploying capital, CEO Mary Barra told investors.
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