Ford CEO warns: Trump's tariffs will last for three years, and price increases across the industry may start in the summer

Ford Motor CEO Jim Farley warned investors that Trump's auto tariff policy is expected to last at least three years, leading to widespread price increases in the industry and potentially causing Ford to lose $1.5 billion in profits this year.

On Tuesday Eastern Time, media reports indicated that Ford Motor Company CEO Jim Farley expects that President Trump's policy of imposing tariffs on imported cars and parts will last "at least three years." If vehicle assembly is moved from Mexico to the United States, the costs of Ford's best-selling models such as the Bronco Sport SUV and the Maverick pickup truck are likely to rise. Farley stated:

Given that about half of the cars in the U.S. are imported, these models will face "tariffs of $5,000 or more," which will inevitably lead to price increases across the industry, possibly starting as early as this summer.

News of Canadian Prime Minister Carney's talks with Trump on Tuesday boosted the shares of Ford and other automakers. After Farley's pessimistic outlook was reported, Ford's intraday gains closed down to 2.6%.

Ford Withdraws Full-Year Performance Guidance, Tariff Impact Estimated at $1.5 Billion Loss

On Monday after the U.S. stock market closed, Ford Motor announced its first-quarter financial report, with impressive results exceeding Wall Street expectations. Traditional models and commercial vehicles remain the profit pillars for Ford, but tariff issues are rapidly becoming a core concern for Ford and the entire auto industry:

• Performance: Ford's Q1 adjusted EPS was $0.14, surpassing analysts' expected loss of $0.043; net income was $471 million, down 64% year-on-year;
• Profit Pillars: Ford Blue (traditional models) and Ford Pro (commercial vehicles) performed strongly, achieving EBIT of $1.2 billion and $1.31 billion, respectively; the electric vehicle division Model E lost $849 million, but the loss was lower than expected;
• Tariff Challenges: The expected impact of Trump's tariff policy will lead to a $1.5 billion loss for the company this year, forcing Ford to withdraw its 2025 performance guidance— three months ago, it had projected operating profits of $7 billion to $8.5 billion for 2025.

Ford Motor CEO Jim Farley pointed out that the supply chain disruptions caused by tariffs are driving up car costs, making it difficult for consumers to afford:

If we produce everything in the U.S., American consumers won't be able to afford new cars at prices like those of Ford.

Media reports indicate that tariff increases, changes in implementation methods, and potential retaliatory measures from other countries pose additional threats. Ford has openly stated that "these are significant industry risks that could have a major impact on financial performance."

Ford has committed to providing updated performance guidance during the second-quarter analyst conference call, while also stating that if the tariff factors instigated by Trump are excluded, its core business activities are actually within the range of previously provided performance guidance.