Ford Motor Co.’s (F) global production is likely to be impacted by new U.S. government restrictions imposed on automotive parts sourced from China.
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The U.S. Commerce Department has proposed banning Chinese software and hardware found in connected vehicles sold in America over national security concerns. Analysts say the move would effectively ban Chinese vehicles from the U.S. market.
For global automakers such as Ford, the proposed ban could have a big impact on its operations. The Detroit-based company not only sources parts from China, but its Lincoln Nautilus SUV is assembled within China. The proposed restrictions would not go into effect until 2027.
Protectionism and an Escalating Trade War
The proposed ban on Chinese software and hardware found in connected vehicles is the latest salvo in an escalating trade war between the U.S. and China. Over the past year, the administration of U.S. President Joe Biden has taken steps to restrict the sale of microchips and processors to China, also citing national security concerns.
China has retaliated by launching anti-dumping investigations into U.S. imports ranging from chemicals to crops, as well as threatening to restrict sales of consumer products such as Apple (AAPL) iPhones and Nike (NKE) running shoes. Both countries have been accused of trade protectionism.
Is F Stock a Buy?
Turning to Wall Street, analysts have a consensus Moderate Buy rating on F stock based on five Buy, nine Hold and one Sell recommendation made in the last three months. The average F price target of $13.67 per share implies 25.82% upside potential from current levels.
