Ford CEO Criticizes Trump’s Tariff Plans, Citing Increased Costs and Industry Disruption

Jim Farley warns that new tariffs could severely impact the U.S. auto sector

Ford CEO Jim Farley has voiced strong concerns over President Donald Trump’s proposed tariffs, warning that they could cause significant disruptions and increased costs for the U.S. automotive industry. Speaking at the Wolfe Research Global Auto, Auto Tech, and Auto Consumer Conference in New York on February 11, Farley criticized Trump’s plans to impose a 25% tariff on steel and aluminum imports, as well as on goods from Mexico and Canada, describing them as harmful to the domestic auto sector.

Farley noted that while Trump has long claimed his trade policies would strengthen American manufacturing, the reality has been quite the opposite. “What we are seeing now are higher costs and significant confusion across the industry,” Farley stated. He emphasized that although Ford sources most of its steel and aluminum domestically, many of its suppliers rely on imported materials. This reliance could result in increased production costs, which would ultimately affect both manufacturers and consumers.

The Ford CEO highlighted the complexity of modern supply chains, pointing out that even small disruptions can lead to ripple effects throughout the industry. “It’s the cost of chaos—here a little, there a little. This is exactly what we’re experiencing,” he explained. Farley expressed particular concern over the proposed 25% tariffs on imports from Canada and Mexico, warning that such measures would deal an unprecedented blow to the U.S. automotive sector.

Farley also criticized the uneven playing field created by the tariffs, suggesting that they would inadvertently benefit Asian and European competitors. He specifically mentioned Toyota and Hyundai, which import hundreds of thousands of vehicles annually from Japan and South Korea with little to no tariff burden. This situation, Farley argued, would give these companies a competitive edge over U.S. manufacturers that rely heavily on North American supply chains. However, it’s worth noting that Hyundai also operates through Mexico for vehicle and parts production, which complicates Farley’s assertion.

To address the potential negative impacts of these tariff policies, Farley plans to meet with U.S. lawmakers and federal officials in Washington, D.C., on February 12. His goal is to explain how the proposed tariffs could undermine the competitiveness of the American auto industry, disrupt supply chains, and ultimately lead to higher prices for consumers.

This latest development adds to the ongoing debate over U.S. trade policy and its implications for domestic industries. As automakers grapple with evolving economic conditions and global competition, the impact of tariffs on supply chains, production costs, and market dynamics remains a critical concern.