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Tariffs on imported steel and aluminum can still be a big hit for companies that buy most of their metal in the United States.
Trump's steel and aluminum tariffs cost Ford about $ 1 billion in profits, according to Reuters, citing comments from Ford CEO Jim Hackett at a conference in Bloomberg, New York York. "If it lasts longer, it will do more damage," Hackett said at the conference.
The problem could be much worse if Ford did not already draw most of its metal from duty-free sources. According to Hackett, Ford buys the majority of its steels and aluminum in the United States. A tweet from Automotive News reporter Nick Bunkley 95% of Ford's steel and 98% of Ford's aluminum come from national sources, but Ford has not confirmed any specific numbers.
But the extra costs do not come solely from imported steel and aluminum. While its competition faces tariffs (25% on steel, 10% on aluminum), US producers have increased their prices to increase their profits while still being cheaper than imports Foreign. Part of Ford's increased spending probably contributed to these price increases.
Even if Ford received 100% of its metal from US sources, it would continue to pay higher prices than before the implementation of rates, and Ford does not exactly increase prices to offset this increase.
Ford
This is not the first time that the fledgling US trade war has pushed Ford in the wrong direction. In late August, Ford announced that it was cancellation of sales plans of the Focus Active built in the United States in the United States in light of the rates. The Focus Active is not expected to sell in sufficient numbers to make US production feasible, so now, instead of receiving a next-generation Focus variant, the US will not get it.
The Trump administration has levied these tariffs in an attempt to bring China into the negotiation of a new trade agreement, but so far, all that has happened, is that it has not been used. The two countries have imposed additional tariffs on additional products. The federal government is also studying the possibility of imposing or not imposing a 25% duty on cars and auto parts from the European Union. A final decision has not yet been announced.
According to Reuters, IHS Markit expects that a full implementation of all these tariffs could have broad repercussions. According to IHS, new car prices could rise from $ 1,800 to $ 5,700, which could reduce annual sales of more than 2 million vehicles by 2020, which would cost hundreds of thousands of jobs.
Ford EcoSport 2018: The EcoSport is also an import, but it comes from India.
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