Ford Is Latest Carmaker to Blame Tariffs for Profit Slump
The automaker lost $36 million from April through June, compared with a profit of $1.8 billion a year earlier, even as sales rose 5 percent to $50.2 billion.
Tariffs imposed by President Trump have been a recurring theme as automakers have reported earnings this month. General Motors, Stellantis, Tesla, Mercedes-Benz and Volkswagen have all cited tariffs as one of the main reasons their profits are falling.
Tariffs lopped $800 million from Ford profits during the second quarter, the company said. Its estimate of $2 billion in tariff costs for the year includes the impact of cost-cutting and other measures the company is taking in response to Mr. Trump's trade policies.
Ford must pay tariffs even though it makes most of its vehicles in the United States because, like all carmakers, it uses imported parts and materials. Those include tariffs of 50 percent on imported steel and aluminum.
Sherry House, Ford's chief financial officer, expressed optimism that the Trump administration could take steps to reduce the impact. 'The administration is aware of these multiple tariffs and is working with us to get this right,' she said during a conference call with reporters.
Carmakers have so far avoided passing on much of the cost of tariffs to consumers. They built as many cars as they could before tariffs took effect, and have absorbed some of the cost. Ford expects that retail prices for its vehicles will rise only 1 percent this year, Ms. House said.
'I'm not providing anything beyond that point now,' she said.
Ford doubled its revenue from sales of electric vehicles despite slower sales in the United States. New models like an electric reincarnation of the Ford Capri sold well in Europe, Ms. House said.
The company also booked a $1.3 billion loss from repairs of vehicles under warranty, cancellation of plans to build an electric sport utility vehicle and other one-time costs.
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Yahoo
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