Ford risks losing £1.1billion from Donald Trump's tariffs after 'bold move' - 'Things are very uncertain'

The company had previously projected earnings before interest and taxes of $7billion (£5.3billion) to $8.5billion (£6.4billion) for 2025, a forecast that did not account for the impact of tariffs.

"It's still too early to fully understand our competitors' responses to these tariffs," Ford CEO Jim Farley told analysts.

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He added: "It's clear, however, that in this new environment, automakers with the largest US footprint will have a big advantage."

Ford's Chief Financial Officer Sherry House said the company was on track to meet that guidance, excluding the tariff fallout.

The tariffs are expected to add $2.5billion (£1.9billion) in costs overall for the year, primarily related to expenses from importing vehicles from Mexico and China.

Ford executives said they have been able to reduce about $1billion (£751million) of that cost through various actions.

One strategy involves transporting vehicles from Mexico to Canada using bond carriers, so they are not subject to US tariffs.
The automaker has also suspended automotive exports to China, but still imports vehicles like its Lincoln Nautilus from the country.

Speaking to Reuters, David Whiston, research analyst at Morningstar, said: "It's a bold move for them to withdraw guidance when GM gave revised guidance including tariffs, though to be fair, things are very uncertain."

Ford executives said they suspended the company's outlook until they have more clarity about the effect of retaliatory tariffs, as well as how consumers may react to price increases.

Cost and quality improvements helped Ford beat expectations, executives said. However, its net income fell sharply to $471 million (£354million) from $1.3billion (£977million) a year earlier.

Earnings received a boost as consumers rushed to purchase vehicles, concerned that tariffs would lead to price hikes. Ford was one of a few automakers that ran incentives to grab market share during this buying frenzy.

Trump's 25 per cent tariffs on automotive imports were expected to add more than $100billion (£75billion) in costs for automakers in the US this year, according to some estimates.

This month, GM cut its profit forecast and said tariffs were expected to cost it up to $5billion (£3.8billion), while Jeep-maker Stellantis also suspended its guidance due to tariff uncertainty.

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Barclays analysts said: "Investors have preferred Ford over GM given Ford has a much higher mix of U.S. sales that are assembled in the US."

They cited Ford's 79 per cent of US sales assembled in the country versus GM's 53 per cent.

The president approved a reprieve last month around levies placed on automotive parts, providing auto companies with credits for up to 15 per cent of the value of vehicles assembled domestically.