Ford expects the impact of trade tariffs to cost it around $2 billion (£1.5bn) this year – with boss Jim Farley hinting it will adopt an increasingly regionalised approach in the future.
The warning came as Ford posted its second-quarter financial results, in which it incurred a net loss of $36m (£27m), despite record revenues for the three months of $50.2bn (£38bn).
That loss was largely down to a $1.9bn (£1.5bn) cost for the cancellation of a project to build a new large, electric seven-seater for the US market.
But Ford said the tariffs introduced on imports into the US by president Donald Trump has already resulted in it having to pay an extra $800m (£604m) in duties in the second quarter – despite it manufacturing most of its cars in the US.
Much of the aluminium, steel and parts for Ford's American-built cars are imported from Canada and Mexico, and US tariffs are applied to those materials when they are imported.
And with the tariffs remaining in place for longer than Ford expected, it now expects costs to continue to rise. The $2bn prediction has risen from the $1.5bn estimate Ford made in March.
While Farley said on an analysts' results call that he saw “a lot of upside” from ongoing negotiations with the US government to secure lower tariffs, he also highlighted how a recent deal to lower tariffs on Japan from 25% to 15% could give rivals from the country a “meaningful” cost advantage.
Farley added that the increased use of tariffs, along with the divergence of EV uptake and emissions regulations in different countries, would push Ford to take a more regionalised approach in the future.
Ford has long held a large manufacturing presence in Europe, and its product line-up here is already largely distinct from that in the US.
“We increasingly see Europe, North America and Asia becoming kind of regional businesses with tariff rates aligned for those three or four regions," Farley said. “That is quite a fundamental change.”
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