According to foreign media reports, Ford Motor CEO James Farley warned at an investor meeting that the U.S. imposing tariffs on Canadian and Mexican imported goods will not only hit the U.S. auto manufacturing industry, but will also give overseas competitors a price advantage.
Although U.S. President Trump briefly put aside a plan to impose a 25% tariff on all imported goods from Canada and Mexico, he said on February 10 that from March 12, 25% of all imported steel and aluminum will be imposed. tariff. Despite warnings that disrupting North American supply chains is expensive for consumers and businesses, Trump insists that his tariff policies will bring factory jobs back to the United States and address trade imbalances.
In fact, more and more North American business leaders are warning that Trump’s planned tariffs will trigger inflation and unemployment, and Ford executives have joined the protest. Ford, who manufactures cars in many parts of the world and is a major buyer of steel and aluminum, including raw materials and finished parts, said Trump’s tariff policy would bring “higher costs and chaos” to the company.
Ford CEO said, “Frankly speaking, imposing a 25% tariff on imported goods from Mexico and Canada in the long run will have an unprecedented huge impact on the U.S. automobile industry.” He also said that this is actually making South Korea, Automotive companies in Japan and Europe benefited from exporting between 1.5 million and 2 million cars to the United States each year without being affected by tariffs on Mexico and Canada, which would be the biggest benefit ever for them.
Ford Chief Financial Officer Sherry House also said that while about 90% of the company’s steel and aluminum come from the United States, many of Ford’s parts suppliers use international metals, which will also cause Ford’s costs to rise after tariffs.
The United States and Canada have been practicing free trade for decades, and Mexico joined the free trade agreement in 1994. The agreement was renegotiated during Trump’s first term, enabling the North American automotive industry to operate highly integrated and efficiently.
“Any import tax that affects North America’s integrated automotive industry will have a devastating impact on all auto companies because it will significantly increase their costs,” said Fraser Johnson, a professor at the School of Business at the University of Western Ontario in Canada.
Automobile is Canada’s second largest and important export commodity. In 2023, Canada’s total automobile export value will reach CAD 51 billion, of which about 93% will be exported to the United States. In 2023, Ford, General Motors, Stellantis, Honda and Toyota have produced a total of 1.5 million passenger cars and employed 128,000 people to manufacture automobiles and parts.
Among them, Ford employs 1,880 people at two factories in Windsor, Ontario, Canada to produce truck engines. Another Ford assembly plant in Oakville, Canada, mainly produces a pickup truck called Super Duty.
AutoForecast Solutions president Joe McCabe said the possible tariffs on automobiles and related parts will not immediately endanger Canadian auto factories. But these tariffs mean that any new investment from automakers will go to factories in the United States, not factories in Canada or Mexico.