Tariffs "tear a hole" in the US auto industry

Ford CEO criticizes Trump Tariffs "tear a hole" in the US auto industry

2025-02-17 From Manuel Christa | Translated by AI 1 min Reading Time

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The recent tariff measures by the Trump administration are facing sharp criticism in the US auto industry. Jim Farley, CEO of Ford, expressed concerns about the announced 25 percent tariffs on imports from Mexico and Canada.

The auto industry is concerned about the announced tariffs in the US.(Image: AI-generated) — The auto industry is concerned about the announced tariffs in the US.
(Image: AI-generated)

Farley warned that these tariffs could "tear a hole" in the US auto industry that "we have never seen before." Farley emphasized that while President Trump often talks about strengthening the US auto industry and bringing more production and innovation to the country, so far, there is "a lot of cost and chaos."

The proposed tariffs could significantly impact the complex supply chains of car manufacturers. Many vehicle parts cross the borders between the USA, Mexico, and Canada multiple times during the production process. A 25 percent duty on incoming goods from these countries could substantially increase production costs and drive up prices for consumers.

US manufacturers such as Ford, General Motors, and Stellantis, which heavily rely on cross-border supply chains, would be particularly affected. Farley emphasized that these tariffs could be "a gold mine for our competitors." Brands like Hyundai, Kia, and Toyota, which import their vehicles from South Korea and Japan without additional duties, would benefit.

Financial markets in turmoil

The uncertainty over future trade policy is already causing unrest in the financial markets. The stock prices of major automakers and suppliers came under pressure following the announcement of the tariffs. Analysts estimate that the additional trade barriers could cost the automotive industry around 33 billion dollars annually worldwide.

Trump administration defends trade strategy

The Trump administration defends the tariffs by arguing that they are necessary to ensure national security and protect domestic industry. However, critics warn that these measures could have the opposite effect: ongoing economic uncertainty, rising prices for consumers, and weakened competitiveness of US automakers.

The coming weeks will show whether negotiations and possible compromises will occur—or whether the tariffs will come into effect as planned. The decision could be pivotal for the US auto industry and its millions of employees. (mc)

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