CNN
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Ford says that auto tariffs will cost the company $1.5 billion this year. However, the automaker does not expect overall US car prices to rise significantly as a result.
Ford CFO Sherry House told reporters Monday that it expects US car prices to edge up 1% to 1.5% in the second half of this year as a result of tariffs on both imported cars and auto parts. Ford announced the tariffs cost as part its earnings report that showed a sharp drop in profits for the first three months of the year.
House said automakers could withdraw some of its current incentives to car buyers, which would raise the cost of buying a car in the near term, and expects slightly higher sticker prices for new models in the fall. Ford does predict a sharp drop in overall industry sales in the second half following a strong first quarter as car buyers rushed to buy vehicles ahead of tariffs taking effect in April.
Since President Donald Trump’s introduced tariffs on imported cars and auto parts, automakers have been trying to get a handle on how many billions of dollars it will cost the industry. The tariffs include a 25% levy on all imported vehicles and a similar tariff on imported auto parts, although the administration introduced rules last week that could allow automakers to offset some charges on the latter.
The financial hit of tariffs on Ford is significantly less than General Motors, which warned shareholders that duties would cost it $4 billion to $5 billion for the remainder of 2025. But Ford said it makes more than 80% of the cars and trucks it sells to US customers at American assembly plants. That’s more than most other automakers, such as GM, which produces more cars and trucks in Canada and Mexico than Ford.
Ford also said that the uncertainty over the overall operating environment, such as supply chain disruptions, caused it withdrew its previous full-year earnings guidance.
Ford’s pricing outlook is similar to what GM CEO Mary Barra told investors last week when she said she didn’t foresee a significant change in the pricing environment. House did not disclose anything about Ford’s own pricing plans, only what it sees as the overall US new car market.
Last week, CEO Jim Farley told CNN’s Erin Burnett Ford would extended an “employee pricing” offer through July 4, but couldn’t promise prices wouldn’t go up after that. Currently, the automaker is selling off its inventory of imported vehicles that arrived before the tariffs took effect last month.
This is a developing story. It will be updated.
