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Ford anticipates a $1.5 billion reduction in this year’s operating profits due to tariffs imposed by Donald Trump, as the automotive sector continues to deal with the challenges of the US president’s trade policies.
The car manufacturer from Michigan, referencing the uncertainty connected with the tariffs, also withdrew the financial guidance it provided three months earlier. Ford had initially projected an operating profit ranging from $7 billion to $8.5 billion for 2025.
Ford noted that supply chain disruptions caused by tariffs could potentially lead to widespread industry upheaval in vehicle production. It also highlighted increased tariffs, variations in their implementation, and the potential for retaliatory actions by other countries as additional risks.
“These are substantial industry risks, which could have significant impacts on financial results, and that make updating full-year guidance challenging right now given the potential range of outcomes,” it said.
The global car industry is struggling to determine the impact of tariffs on vehicles and parts imported to the US, as for months the White House has changed policies and pushed out deadlines. Trump last week said parts imported from China would be exempted, as well as sparing carmakers from levies on steel and aluminium.
Despite that reprieve, General Motors still lowered its guidance last week, citing tariffs. It said it expects adjusted operating earnings to fall between $10bn and $12.5bn, which places the midpoint of the guidance 23 per cent lower than the previous range.
Ford is better positioned on tariffs than its crosstown rival as it manufactures a greater percentage of vehicles in the US, but it remains exposed. The company said it expected a hit to adjusted earnings of $1.5bn in 2025 due to the levies.
Chief financial officer Sherry House said Ford had reduced the cost of tariffs during the first quarter by nearly 35 per cent through changes such as shipping vehicles and parts from Mexico to Canada on bonded trucks, which do not need to pay custom duties at the border.
But Ford reported that first-quarter net income declined 64 per cent from a year ago to $471mn, while adjusted operating earnings fell to $1bn.
Revenue fell 5 per cent to just under $41bn due to planned downtime at several plants worldwide, including the critical Kentucky Truck Plant that makes Ford’s Super Duty trucks.
Ford shares were down 2.6 per cent in after-hours trading on Monday.
