More than 300 retailers wrote a letter to Trump sharing their concerns over the effects of the tariffs on their consumers and the prices they offer. In the letter, they urged the President to take a more diplomatic approach to the issue versus the hardline approach that is currently being used. Now, Ford, one of America’s largest car manufacturers, is joining in on the pushback by sharing the burden that the newest round of tariffs has put on them.
In an interview with Bloomberg TV on Wednesday, Ford CEO, Jim Hackett, revealed that the company has lost more than $1 billion due to additional costs and lost profits as a result of recent tariffs. In particular, the US’s 25 percent tariff on steel and 10 percent tariff on aluminum have raised the price of goods for Ford and other automakers in the United States. A Ford spokesman later told the Detroit Free Press that the $1 billion figure references forecasts for metal costs in 2018 and 2019. Hackett went on to say that much of their business is stalling with the uncertainty in tariffs between China and Canada. In the interview, Hackett said, “Business, you hear them talk about, they count on certainty. In this case, we’re kind of frozen. A lot of businesses aren’t sure, and that’s not good.” He went on to say, “What we’re urging our administration to do – where we’re in China and in Europe – we say, you need to come to an agreement quickly.”
In particular, the trade war has caused issues in two main areas of the Ford supply chain. First off, the trade war is creating difficulties overseas, causing the company to raise prices for their vehicles in China, particularly Lincoln vehicles which are popular there, to avoid taking on the full expense of the tariff themselves. As a result, the total duty on US autos is now at 40% and has resulted in less demand for the vehicle in China. With less demand, they have less need to create those vehicles and have had to move people around in their factory to adjust.
These losses and uncertainty come at a time when Ford is trying to improve their financial situation as a company and for their stakeholders. They have been making moves to increase their share price; develop new technologies; like electronic powertrains, autonomous driving technology, and propulsion technologies; and other businesses. Despite that push, the stock price fell by more than one percent in day trading on Wednesday.