Jim Farley has warned that 25% tariffs on Mexico and Canada could devastate domestic automakers, leading to industry upheaval
Ford CEO Jim Farley has criticized US President Donald Trump’s tariffs, claiming they have introduced “a lot of cost and a lot of chaos” into the automotive sector.
The Trump administration said it will enforce a 25% tariff on imports from Mexico and Canada in March. Trump has also imposed a 10% tariff on Chinese goods.
Farley warned that these tariffs could have a “devastating impact” on US automakers, eliminating billions in profits and disrupting jobs.
“President Trump has talked a lot about making our US auto industry stronger, bringing more production here, more innovation to the US, and if his administration can achieve that… it would be one of the most signature accomplishments,” Farley said at the Wolfe Research conference on Tuesday. However, he suggested the current approach is unsettling and has created significant “policy uncertainty.”
Ford is exploring ways to mitigate the impact, such as stockpiling inventory. While short-term adjustments are possible, prolonged tariffs would require strategic changes. A major concern for Farley is the selective nature of the tariffs. While Mexico and Canada are targeted, South Korea and Japan – home to Hyundai, Kia, and Toyota – face no additional tariffs. He argued that this creates a “bonanza” for foreign competitors and called for a balanced policy.
Farley noted that over 80% of Ford vehicles sold in the US are manufactured domestically, offering some insulation. However, extended tariffs would still raise consumer prices and disrupt the industry.
Beyond tariffs, Farley expressed concern over potential policy shifts, particularly the possible repeal of the Inflation Reduction Act, which provides federal subsidies for US-based electric vehicle and battery production. He cautioned that reversing these incentives could threaten jobs and investments in Tennessee, Ohio, Michigan, and Kentucky, where Ford is expanding EV infrastructure. Earlier, Farley highlighted the growing challenge from Chinese EV manufacturers, describing them as an “existential threat.”
Industry leaders across various sectors have expressed apprehension that the proposed tariffs could lead to increased costs, supply chain disruptions, and broader economic challenges.
Coca-Cola CEO James Quincey said tariffs on steel and aluminum could raise production costs for canned beverages.
Retail giant Costco’s CFO, Gary Millerchip, warned of widespread price hikes. “When it rains, it rains on everybody,” he said.
Ken Griffin, the CEO of investment firm Citadel, called the tariff policy a threat to economic growth and trade alliances, arguing that it creates uncertainty and could weaken US competitiveness.
Manufacturers such as Carrier Global and LCI Industries are adjusting by securing supplies, shifting production, and revising pricing strategies.
