Ford CEO says Trump's tariffs are causing 'chaos' in auto industry

DETROIT — President Donald Trump’s tariffs, both implemented and just threatened, are causing “chaos” for the U.S. automotive industry, according to Ford Motor CEO Jim Farley.

The chief executive of America’s second-largest automaker described 25% tariffs on steel and aluminum, as well as threatened levies of the same amount on Mexico and Canada, as currently adding “a lot of cost, and a lot of chaos” to the industry.

“President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation in the U.S., and if his administration can achieve that, it would be one of … the most signature accomplishments,” Farley said Tuesday during a Wolfe Research conference. “So far what we’re seeing is a lot of cost, and a lot of chaos.”

Farley and incoming Ford CFO Sherry House said a majority of the company’s steel and aluminum are domestically sourced; however, there are suppliers to the automaker that source such materials from outside of the country, which could have an impact on costs.

House said the biggest concern for the company is all of these actions that appear relatively minimal, including on suppliers, combining to negatively impact the automaker’s business.

“We’ll have to deal with it. That’s what I’m talking about cost of chaos. A little here, a little there. … This is what we’re dealing with right now,” Farley said.

Farley seemed most concerned about potential duties on goods from Mexico and the U.S., saying a long-term 25% tariff that could go into effect as soon as March 1 would be “devastating” and “blow a hole in the U.S. industry that we’ve never seen.”

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Farley said he is traveling Wednesday to Washington, D.C., for the second time in three weeks to meet with government officials, including members of Congress, to stress how the policy uncertainty is impacting the industry.

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Last week Farley also said if the Trump administration is going to implement tariffs affecting the automotive industry, it should take a “comprehensive” look at all countries.

Farley singled out Toyota Motor and Hyundai Motor for importing hundreds of thousands of vehicles annually from Japan and South Korea, respectively, that have little to no duties compared with the 25% tariff Trump plans to impose on Canada and Mexico.

Ford regularly touts its American business, including in ad campaigns. The company is the No. 1 auto producer in the U.S., with the most vehicles domestically assembled as well as exported to other countries.