The Trump administration's tariff policy will make Ford's production in the US more expensive, while providing advantages to Japanese competitors in the industry. The American automaker came to this conclusion after the stock exchanges closed last night when presenting the data for the quarter, ARD reported.
Customs costs of two billion dollars
The data makes it clear that Trump's import tariffs will affect the company much more than expected. "Our customs costs will amount to two billion dollars, net", said the head of the concern Jim Farley. The amount of $1.5 billion has been assumed so far, the German public media explains.
The expected operating profit for the year is between $6.5 and $7.5 billion - given that in February the same indicator was between $7 and $8.5 billion. In the last quarter alone, the tariffs cost Ford $800 million, and the loss amounted to $36 million after the profit of $1.8 billion recorded last year. ARD recalls that the US president imposed tariffs of up to 25 percent on imported cars and parts.
Ford produces 80 percent of the cars in the US, but parts for them are imported from all over the world, the company's boss Farley pointed out. Tariffs against Mexico and Canada, as well as increased tariffs of up to 50 percent on aluminum and steel imports, are also having a negative impact.
Does Japan benefit from the tariffs?
The Ford boss also warned that Trump's tariffs would create a "significant" advantage for the company's Japanese competitors such as Toyota. Last week, President Trump announced that the United States would reduce tariffs on Japan from 25 percent to 15 percent.
These reduced tariffs, lower labor costs and favorable exchange rates "are really an advantage for their exports," said Farley, referring to Japanese competition.
The ARD points out that the increased tariffs are a problem not only for Ford, but also for other American companies such as General Motors - for example, they predict annual costs due to tariffs worth between four and five billion dollars.
The German public media reminds us that Trump's motto is "America First". The tariffs he has imposed have already led to a serious drop in profits for German concerns such as BMW, Mercedes-Benz and Volkswagen. But it is not only foreign companies that have suffered from Trump's policy - large American concerns such as General Motors and Ford have also suffered.