Trump’s aluminium and steel tariffs will cost $1 billion in profits, says Ford CEO

Ford chief executive officer Jim Hackett said Wednesday at a Bloomberg business forum that Trump administration's tariffs on imported aluminium and steel will cost the company $1 billion in profits. The second-largest U.S. automaker said the figure is year-over-year increase from March through 2019.

“From Ford’s perspective, the metal tariffs took about $1 billion in profit from us,” Hackett said. “The irony of which is — we source most of that in the U.S. today anyway. If it goes on any longer, it will do more damage.”

Hackett did not specify what period the $1 billion covered. Ford’s spokesman said Hackett was referring to internal forecasts at Ford for higher tariff-related costs in 2018 and 2019.

The Trump administration imposed a 10 percent tariff on imported aluminium and 25 percent tariff on steel from some countries in March, and added Canada, Mexico and the European Union in June.

Last month, Jim Farley, Ford’s president of global markets said: “The escalation of steel and aluminium prices is really significant.”

“It’s a significant headwind for us. It’s something that puts pressure on our own costs,” Jim Farley said after a factory ceremony near Detroit to commemorate building the 10 millionth Mustang muscle car.

In the beginning of the year, the second-largest U.S. automaker had warned that the rising costs for raw materials like steel and aluminium would add $1.6 billion to its overall costs in the current year.

Ford’s Q2 earnings plunged by almost 50 per cent and the company also lowered its 2018 earnings projections.