"Tariffs Are Disruptive... Will Create Holes in the Auto Industry"
GM Chairperson: "Reducing Tariff Impact Through Capital Efficiency"
Jim Farley, CEO of American automaker Ford, criticized U.S. President Donald Trump's tariff policy, saying it would deal a direct blow to the U.S. automotive industry.
On the 11th (local time), Farley attended an automotive industry conference hosted by Wolfe Research in New York and stated that President Trump's tariff policy is "causing a lot of costs and confusion."
Farley said, "President Trump has mentioned strengthening the U.S. automotive industry and increasing U.S. vehicle production," adding, "If that happens, it would be a major achievement, but what we have seen so far is a lot of costs and confusion."
He expressed concern over the 25% general tariff on Canada and Mexico, which President Trump initially planned to implement on the 4th of this month but postponed by one month, calling it "disruptive" and warning that it would create unprecedented holes in the U.S. industry. He also mentioned that Asian and European automakers would benefit from this.
Farley also voiced concerns about the 25% tariffs on steel and aluminum imports set to take effect on the 12th of next month. Although Ford sources most of its steel and aluminum domestically, some suppliers rely on imports, and the tariff increase could lead to higher costs.
He said, "We have to manage the costs of this disruption," adding, "A little here, a little there, this is exactly what we need to address now."
Farley announced that he plans to visit Washington D.C. on the 12th to explain to Congress and the administration the negative impacts of President Trump's tariff policy.
Mary Barra, Chairperson and CEO of General Motors (GM), said she has developed countermeasures to mitigate the impact of President Trump's tariff policy.
At the same conference, Barra stated, "If tariffs persist long-term, we have been studying ways to improve capital efficiency," and said they could reduce the tariff impact by 30-50% without additional capital expenditure.
Meanwhile, according to the Brookings Institution, a U.S. think tank, if President Trump imposes a 25% tariff on Canada and Mexico, employment in the U.S. is expected to decrease by 177,000 jobs. U.S. automotive exports to Canada and Mexico are estimated to decline by 25% and 23%, respectively.
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