U.S. President Donald Trump’s tariff threats and actions are causing “chaos” in America’s automotive industry, says Ford Motor Co. (F) CEO Jim Farley.
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Farley, the head of America’s second-largest automaker, said the latest 25% tariffs levied on U.S. imports of steel and aluminum as adding “a lot of cost, and a lot of chaos” to the Detroit auto industry. Farley said while most of Ford’s steel and aluminum are sourced domestically, there are suppliers to the automaker that source materials from abroad, which could have an impact on the company’s costs.
“President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation in the U.S., and if his administration can achieve that, it would be one of … the most signature accomplishments,” Farley said at an industry conference. “But so far what we’re seeing is a lot of cost, and a lot of chaos.”
North American Integration
Farley added that he is most concerned about potential tariffs of 25% that could be placed on goods from Canada and Mexico starting March 1, a situation that could be “devastating” to U.S. automakers and “blow a hole in the U.S. industry.”
Farley pointed out that the automotive industry is heavily integrated across North America, with manufacturing plants and parts suppliers in the U.S., Canada and Mexico. Until now, parts and vehicles flowed freely across the three countries borders. But Trump’s tariffs now threaten that free flow of goods.
Farley said he is traveling to Washington, D.C. this week for the second time in a month to meet with government officials, including members of Congress, to stress how damaging just the threat of tariffs is proving to be on the auto industry.
F stock is down 24% over the last 12 months.
Is F Stock a Buy?
The stock of Ford Motor Co. has a consensus Hold rating among 15 Wall Street analysts. That rating is based on four Buy, eight Hold, and three Sell recommendations issued in the last three months. The average F price target of $10.56 implies 14.66% upside from current levels.
