Ford Motor Company has announced that it expects a $1.5 billion reduction in adjusted earnings before interest and taxes (EBIT) this year as the result of new import tariffs introduced by President Trump. Ford has also suspended its annual financial guidance, citing ongoing uncertainty around the impact of these tariffs moving forward. The $1.5 billion hit is well below GM’s forecast of $4 billion to $5 billion in extra tariff-related costs.
As covered by our sister publication, Ford Authority, the Blue Oval company revealed an earnings per share (EPS) figure of 14 cents in its first-quarter earnings report, a sharp decline from 49 cents a year earlier. Despite this drop, the latest EPS figure was significantly higher than analysts’ expectations of just 2 cents per share. Ford’s revenue for the quarter fell by 5 percent to $40.7 billion, exceeding analyst forecasts of $36 billion and buoyed by strong vehicle sales as consumers rushed to buy ahead of potential price increases caused by the tariffs.
The added costs are expected to be driven primarily by taxes paid on vehicles imported from China and Mexico, with an estimated $2.5 billion in costs over the course of the 2025 calendar year. The company expects to offset about $1 billion of these expenses. Ford has also suspended automotive exports to China, but will continue to import the Chinese-built Lincoln Nautilus.
Lincoln Nautilus
On Monday, Ford CEO Jim Farley stated that while full effect of the tariffs remains uncertain, automakers with a strong U.S. manufacturing base will be better positioned overall. Notably, 79 percent of Ford’s U.S. sales are produced domestically, a significantly higher proportion than GM, the latter of which manufactures only 53 percent of its U.S. sales domestically.
Beyond the tariff challenges, Ford is also grappling with significant losses in its electric vehicle and software efforts. The company now expects these segments to incur losses of up to $5.5 billion this year, adding to the $10 billion in losses accumulated since 2023.
GM Renaissance Center
Meanwhile, GM expects a financial hit of $4 billion to $5 billion as a result of the new Trump tariffs, lowering its EBIT expectations from an initial range of $13.7 billion to 15.7 billion to a revised range of $10.0 billion to $12.5 billion.
Comments
HABEMOS MAMMA …. Make.AmerikaGreat.Heiliger.Again !
a blonde would be greater but
If they all hadn’t gone way overboard on price increases over the past 5 years, buyers might be able to pony up for tariffs. But, oh no, not the case. Those estimates had better include tons of no-sales.
$6.5 billion that won’t be shared with the workers. Or reinvested into facilities.
Where’s Fain when we need him to chime in?
Or $6.5 billion that cannot be used for stock buybacks. Face it, gm more than Ford has shafted the US worker. With the exception of trucks, all the high volume vehicles are assigned to low-wage nations while the US plants are assigned slow-selling EVs.
Bull.
Cause they’ll increase sales vs brands with significantly more imports such as Toyota, Hyundai and Mercedes. Expect profits to INCREASE 4-5 billion.
This goes back to tax revenue valves when you raise/lower rates. Lower rates attract investment and literally every time rates are lower, revenue is increased. Does nobody understand the dynamics of economies???
You obviously don’t….
Well, GM and ford both are ramping up production. What do you expect? All those vehicles to be sitting on lots? If GM and ford internally believed that was the case, they probably would have shuttered a couple shifts not add some. This math doesn’t work out somewhere, and I’ll hedge my bet that the several hundred production planners at GM probably are the ones in the know. After all, they just dropped multiple millions into new production. This article also states quite clearly that the financial “gurus” were shocked by the “surprisingly” positive sales this quarter. Sounds like maybe they need to be let go is they’re that wrong.
So importers do pay tariffs after all, not the exporting country, and pass on some or all of the tariffs to purchasers, i.e. Americans. Contrary to what we’ve been falsely told, and confirmed over and over again by economists. But not to worry, y’all signed up for it at the voting booth, so pay up!
The importer is who writes the check yes, but in many instances, such as Walmart, who is asking their providers to meet them half way and reduce prices to offset the tarrifs, the country of origin also pays the tarrifs. Sometimes that works, sometimes it doesn’t. When it doesn’t, your 60$ brammans now are 120$, and at that point the consumer will now go and buy redwings made in Kentucky, therefore keeping profits and tax revenue here, as well as keeping jobs. Either way it works. Hence everyone else does this.
For example, yesterdays trade deal with England doesn’t remove any of their protectionist tarrifs, but everything they need to import they simply decided to buy from us instead of Asia.
That presumes that a) there is the capacity to make the product in America, and b) that it can be done at a similar cost to what the product costs now, even with tariffs
For example, ~50% of aluminum is imported into the USA, mostly from Canada because there is no additional smelting capacity to produce it all in the USA, and it takes 5-10 years to bring a new smelter online. So with 25% tariffs on it, the purchaser pays and passes on the cost if they want to stay in business.
In any case, Ford and GM are talking about those cost hits because they are actually going to incur those costs.