Ford fears $2.5b tariff blow

Ford Motor Company has suspended its annual guidance and warns US President Donald Trump’s tariffs are likely to cost the firm about US$1.5 billion (NZ$2.5b) in adjusted earnings before interest and taxes.

It says the decision was made because of uncertainty around levies introduced by the US administration in recent weeks.

The carmaker announced in February that its earnings before interest and tax for 2025 would be between US$7b and US$8.5b, with the forecast not taking tariffs into account.

Sherry House, Ford’s chief financial officer, says the company is on track to meet that guidance, excluding the fallout from tariffs, reports Reuters.

Ford executives say they have suspended the company’s outlook until they have more clarity about the effect of retaliatory tariffs and how consumers will react to price increases.

The blue oval’s revenue fell five per cent in the first quarter of this year to US$40.7b but earnings improved as consumers rushed to buy vehicles before the tariffs and potentially higher prices kicked in.

Ford says tariffs will add US$2.5b in costs overall for the year, mainly related to expenses from importing vehicles from Mexico and China.

It has been estimated Trump’s 25 per cent tariffs on automotive imports will add more than US$100b in costs for carmakers in the US this year, reports Reuters.

However, the president approved a reprieve last month for levies placed on automotive parts.

GM recently cut its profit forecast, saying tariffs are expected to cost it up to US$5b, and Stellantis has suspended its guidance because of tariff uncertainty.