Ford readies for the impact of tariffs, suspends 2025 financial guidance
Ford Motor Company recently announced that its first-quarter financial picture was better than Wall Street expected. However, President Donald Trump’s tariffs will likely lead to a difficult back half of 2025, according to the company.
“Our results in the first quarter show that the Ford turnaround plan is working,” Chief Financial Officer Sherry House told CNBC and other outlets. “We are transitioning this company into a higher growth, higher margin, more capital efficient and more durable business.”
Ford reported revenue of $40.7 billion, down from $42.8 billion over the same period last year.
What impact will tariffs have?
As for the full-year outlook, Ford’s press release also spoke about tariffs, saying that the company estimates a net adverse adjusted earnings impact of about $1.5 billion for 2025.
Given material near-term risks, especially the potential for industrywide supply chain disruption impacting production, the potential for future or increased tariffs in the U.S., changes in the implementation of tariffs including offsets, retaliatory tariffs and other restrictions by other governments, as well as potential market impacts, the company said it is suspending financial guidance.
The tariffs, which went into effect in April, stipulate a 25% levy on all imported vehicles. In addition, there is a 25% tariff on auto parts coming from Canada and Mexico. However, vehicles that go through a final assembly process in the United States will qualify for partial reimbursement.
CNBC reported that Ford now expects American sales to come in at 15.5 million this year, down about 500,000 from initial projections, due to the tariffs. The auto giant has also reportedly stopped U.S. exports to China.
Ford said it is continuing to make improvements regarding quality, as well as cost reductions. However, Ford CEO Jim Farley added Monday, May 5, that the tariff impact amounts to “huge numbers.”
Ella Rae Greene, Editor In Chief
