Evidence is mounting that automakers are taking a hit from President Donald Trump’s tariffs, and the car companies say the worst may be yet to come.
Large automakers including Ford, Honda, and BMW say they are all reeling from the effects of the tit-for-tat tariffs between the US and China, as well as Trump’s tariffs on all steel and aluminum tariffs coming into the US.
The latest example came from Ford, which announced last week that it would be forced to lay off employees as it cuts costs. Some of the impetus for the layoffs is a restructuring program the company is undertaking, but recent sales woes in China and increased material costs are also driving some of the automaker’s pain.
Ford CEO Jim Hackett told an audience at a Bloomberg conference that the steel and aluminum tariffs will cost the company $1 billion in 2018 and 2019.
“From Ford’s perspective the metals tariffs took about $1 billion in profit from us,” Hackett said. “The irony of which is we source most of that in the US today anyway. If it goes on any longer, it will do more damage.”
Sales of Ford cars in China have also tanked in 2018 — the company reported a 43% decline for the month of September compared to the same month in 2017, as well as a 30% fall during the first nine months of the year compared to the same time period in 2017.
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