On May 5, 2025, Ford Motor Co. shattered that notion. The company expects a $1.5 billion impact to its operating profit this year from the tariffs. This optimistic outlook arrives as the Trump administration’s increasingly fluid trade policies continue to inject uncertainty into the automaker’s future. Ford’s move makes sense as a hedge against an uncertain and volatile market future. In light of this, the company’s determined to retract its full-year financial outlook.
During an earnings call with analysts led by CEO Jim Farley, Ford reported a revenue drop of 5%, totaling $40.66 billion, compared to a forecasted revenue of $38.02 billion. The announcement sent Ford’s stock tumbling, which fell more than 2% in after-hours trading on the shocking news.
Ford’s Chief Operating Officer, Kumar Galhotra, to the serious damage that has been inflicted by recent trade policy. He especially focused on the challenges posed by importing rare earth materials from China.
“The rare earth materials from China, for example, how they are imported, not just for us, but for the entire industry, has become rather complicated over the last few weeks.” – Kumar Galhotra
He went further to explain the chaos that might result from the short-term effects of implementing tariffs, saying,
“It would take only a few parts to potentially cause some disruption into our production.” – Kumar Galhotra
Ford expects to be more insulated and less severely affected by tariffs. They’re determined to make sure they thrive in doing so. That resilience is largely due to Ford’s stick-to-itiveness, building a higher percentage of vehicles in the U.S. than its competitors.
President Donald Trump’s trade policy might have similar goals, specifically provoking domestic manufacturing of products like automobiles and auto parts. Most notably, in the last few months he’s signed executive orders to ease some of the 25% tariff burden on these goods. Industry experts caution that the rapid pace of change with these policies has created unpredictability. This unpredictability would threaten the entire industry’s supply chains to the broader automotive sector.
Ford CEO Jim Farley said he’s encouraged by Ford’s strength in the market as it continues through these transitions.
“It’s too early to gauge the related market dynamics, including the potential industrywide supply chain disruptions. Automakers with the largest U.S. footprint will have a big advantage, and, boy, that is true for Ford. It puts us in the pole position.” – Jim Farley
