Ford is lowering its full-year earnings forecast.
President Donald Trump’s imposed tariffs already forced Ford to cancel its plans of importing the Focus Active from China. Earlier this year, the Blue Oval also decided to phase several car models out of its lineup leaving the Mustang as the only non SUV, crossover, or pickup Ford in the United States. While many enthusiasts don’t accept this strategy, after all, it’s all about the profits.
But the company’s efforts to optimize its American operations are continuously obstructed by the new tariffs which have cost Ford about $1 million in profits. Speaking at a Bloomberg conference in New York earlier this week, the automaker’s CEO, James Hackett, revealed the parameters of the tariffs’ consequences for Ford.
The auto industry is trying to deal with the tariffs:
“From Ford’s perspective the metals tariffs took about $1 billion in profit from us,” Hackett said. “The irony of which is we source most of that in the U.S. today anyway. If it goes on any longer, it will do more damage.” During his speech, Hackett didn’t specify what period the loss covered, but a spokesman for the manufacturer explained the forecast covers 2018 and 2019.
Trump’s administration is threatening the automotive industry with even more tariffs. Under Section 232 of the U.S. Trade Expansion Act, the office, under certain circumstances, could impose duties on goods that are being imported into the United States and are classified as a threat to the national security. Simply put, vehicle and auto parts imported from the European Union and other trading partners of the United States could be tariffed with up to 25 percent.
According to market analysts from IHS Markit, the implementation of the Section 232 tariffs would add between $1,800 and $5,700 to a new vehicle’s price sticker. In just a couple of years, this could lead to more than 300,000 job cuts in the industry and even affect the country’s economic growth.