Ford expects to take a $1.5B profit hit from tariffs this year

By ROB HULL, MOTORING EDITOR

Published: | Updated:

Ford Motor Company said on Monday that it expects to take a $1.5billion (£1.1bn) hit to operating profit from tariffs this year. The motoring giant followed in the tyre tracks of other automakers by withdrawing its full-year financial guidance due to the uncertainty created by the Trump administration's evolving trade policy. The company had previously projected earnings before interest and taxes of $7billion (£5.3billion) to $8.5billion (£6.4billion) for 2025.

Ford Motor Company said on Monday that it expects to take a $1.5billion (£1.1bn) hit to operating profit from tariffs this year. The motoring giant followed in the tyre tracks of other automakers by withdrawing its full-year financial guidance due to the uncertainty created by the Trump administration's evolving trade policy. The company had previously projected earnings before interest and taxes of $7billion (£5.3billion) to $8.5billion (£6.4billion) for 2025.

However, this forecast did not account for the impact of tariffs, it said. Speaking on Monday, CEO Jim Farley, provided an optimistic outlook when speaking to analysts: 'It's too early to gauge the related market dynamics, including the potential industrywide supply chain disruptions. 'Automakers with the largest US footprint will have a big advantage, and, boy, that is that true for Ford. It puts us in the pole position.'

However, this forecast did not account for the impact of tariffs, it said. Speaking on Monday, CEO Jim Farley, provided an optimistic outlook when speaking to analysts: 'It's too early to gauge the related market dynamics, including the potential industrywide supply chain disruptions. 'Automakers with the largest US footprint will have a big advantage, and, boy, that is that true for Ford. It puts us in the pole position.'

Ford became the latest automotive giant to pull profit guidance as the chaos unleashed by Trump made financial forecasting impossible. Shares in the carmaker fell approximately 2.3 percent in after-hours trading following the announcement.

Ford became the latest automotive giant to pull profit guidance as the chaos unleashed by Trump made financial forecasting impossible. Shares in the carmaker fell approximately 2.3 percent in after-hours trading following the announcement.

On Monday, the US brand said its net income fell by about two-thirds in the first quarter to $473million (£354million) from $1.33billion (£999m). Revenue also dropped 5 percent to $40.66billion (£30.40bn). The company said the risks associated with tariffs had made updating full year guidance 'challenging'.

On Monday, the US brand said its net income fell by about two-thirds in the first quarter to $473million (£354million) from $1.33billion (£999m). Revenue also dropped 5 percent to $40.66billion (£30.40bn). The company said the risks associated with tariffs had made updating full year guidance 'challenging'.

It said in its statement: ' Given material near-term risks, especially the potential for industry-wide supply chain disruption impacting production, the potential for future or increased tariffs in the US, changes in the implementation of tariffs including tariff offsets, retaliatory tariffs and other restrictions by other governments and the potential related market impacts, and finally policy uncertainties associated with tax and emissions policy, the company is suspending guidance.

It said in its statement: ' Given material near-term risks, especially the potential for industry-wide supply chain disruption impacting production, the potential for future or increased tariffs in the US, changes in the implementation of tariffs including tariff offsets, retaliatory tariffs and other restrictions by other governments and the potential related market impacts, and finally policy uncertainties associated with tax and emissions policy, the company is suspending guidance.

'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 it will provide a further update during its second-quarter earnings announcement. Ford's statement came just days after Stellantis - which owns the likes of Citroen, Fiat, Peugeot, Vauxhall and a host of other popular brands - and Mercedes-Benz also pulled their profit guidance on uncertainty caused by Trump's tariffs.

'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 it will provide a further update during its second-quarter earnings announcement. Ford's statement came just days after Stellantis - which owns the likes of Citroen, Fiat, Peugeot, Vauxhall and a host of other popular brands - and Mercedes-Benz also pulled their profit guidance on uncertainty caused by Trump's tariffs.

German car maker Volkswagen said profits had tumbled 40 percent in the first three months of the year as it warned over the impact of the global trade war. Swedish car giant Volvo announced last week that it will cut jobs as part of a £1.4billion cost-saving drive as Trump's tariffs and a slump in EV sales had weighed heavy - and also saw it pull its full-year profit forecast. And Aston Martin boss Adrian Hallmark last week said the luxury car maker would limit sales to the US , one of its biggest markets.

German car maker Volkswagen said profits had tumbled 40 percent in the first three months of the year as it warned over the impact of the global trade war. Swedish car giant Volvo announced last week that it will cut jobs as part of a £1.4billion cost-saving drive as Trump's tariffs and a slump in EV sales had weighed heavy - and also saw it pull its full-year profit forecast. And Aston Martin boss Adrian Hallmark last week said the luxury car maker would limit sales to the US , one of its biggest markets.

The company reported a 13 percent fall in first quarter revenues to £233.9million and a loss of £79.6million, although that was improvement on the £138.8million loss a year earlier. The flurry of updates – which highlight the repercussions of Trump’s tariffs on the car industry – came after Coventry-headquartered Jaguar Land Rover last month paused shipments to America in response to the White House’s policy. The car industry was rocked when the President announced a 25 percent charge on vehicle and part imports to the US in a bid to ramp up domestic manufacturing.

The company reported a 13 percent fall in first quarter revenues to £233.9million and a loss of £79.6million, although that was improvement on the £138.8million loss a year earlier. The flurry of updates – which highlight the repercussions of Trump’s tariffs on the car industry – came after Coventry-headquartered Jaguar Land Rover last month paused shipments to America in response to the White House’s policy. The car industry was rocked when the President announced a 25 percent charge on vehicle and part imports to the US in a bid to ramp up domestic manufacturing.

The White House last week was forced to climb down after a backlash from industry leaders who warned of higher prices and lower sales. In a speech in Michigan - America's car making capital - to mark his first 100 days in office, Trump said manufacturers with factories in the US will be able to reduce the amount they pay in import taxes, depending on how many cars they sell and at what price. The climbdown came after motor industry groups including General Motors, Toyota and VW wrote to the White House urging Trump to reverse course. But geopolitical uncertainty continues to affect the industry, adding to existing problems including the transition to EVs and depressed consumer demand.

The White House last week was forced to climb down after a backlash from industry leaders who warned of higher prices and lower sales. In a speech in Michigan - America's car making capital - to mark his first 100 days in office, Trump said manufacturers with factories in the US will be able to reduce the amount they pay in import taxes, depending on how many cars they sell and at what price. The climbdown came after motor industry groups including General Motors, Toyota and VW wrote to the White House urging Trump to reverse course. But geopolitical uncertainty continues to affect the industry, adding to existing problems including the transition to EVs and depressed consumer demand.

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