A 25 percent tariff on vehicle and auto parts imports from Mexico and Canada would have a devastating impact on the U.S. auto industry, Ford CEO Jim Farley warned.
“Let’s be honest: In the long term, a 25 percent tariff on imports from Mexico and Canada would blow a hole in the U.S. auto industry like we’ve never seen before,” Farley said.
“This would give foreign brands a free pass, which would not be subject to these tariffs, while companies that comply with the USMCA and rely on an integrated supply chain in North America would face a brutal blow.”
During a conference, the executive warned that such a measure would not only affect manufacturers like Ford, which comply with the USMCA rules, but would also disproportionately benefit South Korean, Japanese and European automakers that export between 1.5 and 2 million vehicles to the U.S. without being subject to these tariffs.
The executive also warned that uncertainty about the possible reversal of the Inflation Reduction Act (IRA) puts thousands of jobs in the sector at risk. “We have invested capital in battery production and assembly plants in Ohio, Michigan, Kentucky and Tennessee, and many of those sources of employment could disappear if key elements of the IRA are revoked,” he said.
Farley was blunt in describing the current outlook for the US automotive industry: “What we are seeing is a lot of cost and a lot of chaos.” Uncertainty about tariffs, volatility in the supply chain and regulatory risks have created a pressure environment for manufacturers. “If the intention is to strengthen the US automotive industry, this is not the way,” he said.
Source: oem
