US carmakers face possible tariffs: Ford believes it is best prepared

Major US automakers such as Ford and General Motors may face possible tariffs on imports from Mexico and Canada this weekend. President Donald Trump on Thursday confirmed his plans to impose a 25 percent tariff on cars made outside the U.S., which could greatly affect the entire auto industry.

Ford $FCEO Jim Farley sees the possible imposition of tariffs as an important political issue. According to Farley, Ford has a clear plan and is well prepared to handle the situation.

"We think this issue will be addressed over the next few months," Farley said at a Ford Performance event in Charlotte.

Farley said Ford is in a better position than its competitors because it has the largest manufacturing base in the U.S.

"Ford has the largest manufacturing infrastructure in the U.S., and we are encouraged by the administration's positive approach to the auto industry and its impact on the economy," Farley added.

Although Ford employs the largest number of United Auto Workers (UAW) union members, it also uses manufacturing facilities in Mexico and Canada. However, Farley stressed that the core F-150 pickup truck series, which has been the best-selling pickup in the U.S. for 48 years, is manufactured exclusively in the United States.

Impact on the automotive industry

Farley also stressed the importance of working with the new Trump administration in areas aimed at supporting American workers and industry. The administration is expected to focus on key policy areas such as CO2 regulation, electric vehicle subsidies (the so-called IRA EV tax credit) and tariffs that can affect the entire industry.

The Trump administration recently rescinded Joe Biden's executive order that set a goal of 50% EV sales by 2030. This may be seen as an advantage by some automakers, but it also brings regulatory uncertainty that may affect long-term investments.

Another issue is the fate of the USD 7,500 tax credit for EVs. The Trump administration is trying to repeal this programme, but this is not easy, as it cannot be repealed by a mere executive order. Ford is one of the car companies that benefits greatly from these subsidies, as it is the second largest seller of electric cars in the US after Tesla.

Despite these uncertainties, Ford is continuing to develop electric cars and hybrids. The company is focusing on a new generation of electric cars that should be profitable from day one. Understanding the different needs of EV users is key, Farley said, so Ford is developing smaller and midsize EVs that should better meet the needs of most buyers.

Last year, Ford scrapped plans to build a large SUV and instead focused on a midsize electric pickup. In light of Tesla's declining profits and the negative impact of the tax credit repeal on competitors like GM, Ford hopes to keep support for EVs as long as possible.

"We're fully engaged," Farley said of electric car development. "We have a really exciting platform that our team in California has developed. Right now we're getting ready for industrial production, we'll be rebuilding factories soon, and a new line of affordable EVs will be coming to market in the next few years."

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Source: Yahoo Finance