Ford CEO says rare earths shortage forced it to shut factory
Ford's production struggles are part of the ongoing tit-for-tat trade escalation between Washington and Beijing . But the company is expecting relief in the coming weeks. In April, Chinese officials stopped the flow of magnets into the US — a critical component found in nearly every modern car's brake pads, seats, windshield wipers, and batteries.
The pause came in response to President Donald Trump 's then-145 percent tariffs on all Chinese imports. The throttled magnet trade threatened to strangle production plants and empty car dealership lots, sending automakers and industry groups into a tizzy. In May, the Alliance for Automotive Innovation — which represents major US automakers — sent a letter to President Trump warning that China's response could paralyze car production.
Later that month, workers at Ford's Chicago plant, where the company builds the popular Explorer SUV, were told to go home due to the magnet shortage. But as Ford continues to scramble for parts, the company is now expecting a reopening of the supply spigot.
American and Chinese trade negotiators have announced a tentative agreement that lowers tariff rates and resumes magnet exports. The deal includes temporary export licenses for rare-earth suppliers . Those licenses will allow magnet shipments to resume to the top three US automakers — including Ford — as soon as this month. China's President Xi Jinping has not officially signed the deal, but President Trump posted on Truth Social that the agreement was 'done.'
Industry analysts confirmed to DailyMail.com that rare-earth magnets will likely be exempt from American tariffs under the new deal. Still, as the pipeline starts back up, Farley's announcement underscores China's current leverage over American manufacturing. The US once refined its own rare-earth magnets for vehicle assembly, with facilities operating across dozens of Midwestern states.
But 20 years ago, the last domestic refinement plant — located in Indiana — shut down. China, which now controls more than 90 percent of global rare-earth processing capacity, filled the gap. American automakers are now looking elsewhere for supply, including Australia, Canada, and Saudi Arabia.
'Should the US-China trade deal be upheld by both sides, US automakers should be able to secure enough rare earths to continue their production as scheduled,' Seth Goldstein, a vehicle analyst at Morningstar, told DailyMail.com. 'I would guess all US automakers are looking to secure alternate rare earths supply outside of China as a way to protect themselves from the potential that China may halt exports again in the future.' A representative for Ford didn't immediately respond to DailyMail.com's request for comment.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
9 minutes ago
- Reuters
Tariff revenue makes it hard for Supreme Court to rule against Trump, Bessent says
WASHINGTON, Aug 12 (Reuters) - Increasing revenues flowing into U.S. government coffers from tariffs would make it difficult for the Supreme Court to rule against the Trump administration on the issue if a lower court case makes its way to country's top court, U.S. Treasury Secretary Scott Bessent said on Tuesday. "The more money coming in, it gets harder and harder for SCOTUS to rule against us," Bessent said in an interview on Fox Business Network's "Kudlow." Bessent was responding to a question about a case currently in front of the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., which challenges the legality of what Trump calls "reciprocal" tariffs as well as a separate set of tariffs imposed in February against China, Canada and Mexico.
Reuters
9 minutes ago
- Reuters
US Treasury's Bessent says India has been 'recalcitrant' in trade talks
WASHINGTON, Aug 12 (Reuters) - U.S. Treasury Secretary Scott Bessent on Tuesday said several large trade agreements were still waiting to be completed, including with Switzerland and India, but the Southeast Asian country had been "a bit recalcitrant" in talks with the United States. Bessent told Fox Business Network's "Kudlow" he hoped the Trump administration could wrap up its trade negotiations by the end of October. "That's aspirational, but I think we are in a good position," he said, adding " I think we can be, we will have agreed on substantial terms with all the substantial countries."
Reuters
10 minutes ago
- Reuters
Trump rebukes Goldman's Solomon over bank's tariff research
Aug 12 (Reuters) - U.S. President Donald Trump hit out at Goldman Sachs (GS.N), opens new tab CEO David Solomon on Tuesday, saying the bank had been wrong to predict U.S. tariffs would hurt the economy and questioned whether Solomon should lead the Wall Street institution. The bank CEO is the latest corporate boss to become the target of Trump's ire, and the situation shows the sensitivity corporations face about tariffs. Goldman is the latest Wall Street bank to face pressure, after Trump criticized JPMorgan Chase (JPM.N), opens new tab and Bank of America (BAC.N), opens new tab over alleged debanking, or refusing to provide banking services to individuals. In a social media post, Trump said foreign companies and governments were mostly absorbing the cost of his tariffs. "But David Solomon and Goldman Sachs refuse to give credit where credit is due. They made a bad prediction ... on both the Market repercussion and the Tariffs themselves." Trump said Solomon should maybe focus on being a DJ, a hobby Solomon abandoned some time ago, "and not bother running a major Financial Institution." A Goldman Sachs spokesperson declined to comment. A spokesperson for the White House did not immediately respond to a request for comment. Since February 1, when Trump kicked off trade wars by slapping levies on imports from Mexico, Canada, and China, at least 333 companies worldwide have reacted to the tariffs in some manner, as of August 12, according to a Reuters tracker. While Trump did not specify which Goldman research he was referring to, the Wall Street bank - like many of its peers - has taken a bearish stance on Trump's tariffs. In a note published on Sunday, Goldman Sachs analysts, led by chief economist Jan Hatzius, said U.S. consumers had absorbed 22% of tariff costs through June and that figure could rise to 67% if recent tariffs continue on the same trajectory. "I think that David should go out and get himself a new economist," Trump wrote. Hatzius declined to comment. In April, Goldman also warned sweeping U.S. tariffs would weigh on global growth and prompt the Federal Reserve to cut interest rates more aggressively than previously expected. Tariffs are taxes levied on imported goods to typically protect domestic industries or influence trade policies. Their cost can be distributed among manufacturers, retailers, and consumers, depending on market conditions and supply-chain dynamics. As the second-quarter earnings season progresses, companies reported a combined financial hit of $13.6 billion to $15.2 billion between July 16 and August 8 for the full year from Trump's tariffs, according to Reuters' global tariff tracker. Despite Trump's bid to upend global trade, U.S. stocks have continued to reach new records on AI exuberance and expectations the Fed will ease borrowing costs. U.S. consumer prices increased marginally in July, new data showed Tuesday. Tariffs have proven to be a sensitive topic for companies and banks. A senior JPMorgan Asset Management investment strategist this year said he had held back on some of his public comments on U.S. tariffs due to concerns about the impact his full opinions would have on his colleagues and on the Wall Street bank. Other companies have faced pressure on tariffs. The White House accused Amazon in April of a "hostile and political act" with its reported plan to list prices of goods in light of new tariffs - which the e-commerce company later said was an idea that it did not put into place. Trump in May said Walmart should "eat the tariffs" rather than raise prices. Trump has also taken broad aim at corporate bosses and Wall Street banks for other topics. Last week, the president demanded Intel (INTC.O), opens new tab CEO Lip Bu-Tan resign due to his ties to Chinese firms, and has repeatedly targeted Apple boss Tim Cook for making U.S.-sold iPhones outside the country. "President Trump jawboning about banks, whether it's Goldman Sachs or Bank of America, should not hold any merit when thinking about an overall investment," said David Wagner, head of equities at Aptus Capital Advisors. Because the economic data is complex, "investors are bound to have differing opinions regarding the health of the consumer," he added.
