Ford says its team is 'in the trenches' trying to minimize the impact of tariffs on its business

Ford suspended 2025 guidance due to supply chain and future tariff risks.Spencer Platt/Getty ImagesFord suspended 2025 guidance due to supply chain and future tariff risks.The COO of Ford said his team "is in the trenches" trying to minimize the impact of tariffs.Last week, the White House said Americans won't have to pay more to buy cars because of import duties.Ford said on Monday it would suspend financial guidance for 2025 because supply chain disruptions and future tariffs carry "substantial industry risks."On its first-quarter earnings call, Ford executives also outlined several steps they are taking to reduce the impact of President Donald Trump's tariffs on their business."We're not just improving cost and quality, the team is also in the trenches, taking actions to minimize the impact of tariffs on our business," Ford's chief operating officer, Kumar Galhotra, said on the call.Galhotra outlined what some of those actions are:Vehicles shipped to Canada from Mexico via the US are now transported on bonded carriers, Galhotra said. That means they aren't subject to US tariffs. A bonded carrier is allowed to move goods through US crossings without having to pay duties during that portion of the journey.Car parts that pass through the US are getting the same treatment.Ford stopped exporting vehicles to China while continuing to use China as an export hub for Southeast Asia and other regions.The company is looking for opportunities to develop local supply chains, Galhotra said.On Monday, Ford reported that it expects to offset $1 billion in tariff-related costs, out of the expected $2.5 billion.It also estimated that tariffs would slash full-year adjusted earnings before interest and taxes by about $1.5 billion.Ford reported $40.7 billion in first-quarter revenue, a 5% decline compared to the same quarter last year. Net income was $471 million, a 64% decline from last year.Ford's shares were down 2.6% in premarket trading on Tuesday.Industry-wide impactLast week, the White House said Americans won't have to pay more to buy cars because of import duties."Because again, there is now a massive economic incentive for automobile producers to expand production in the United States, and whatever they make here, there will be no tariff," White House deputy chief of staff Stephen Miller said in response to a question about car costs.But Ford, and its competitors both in the US and abroad, are not so sure.On Monday, Ford's CFO, Sherry House, told reporters on a call that the company expects US car prices to rise by 1% to 1.5% in the second half of the year because of tariffs on cars and parts.Japan's Honda previously said that Trump's tariffs could have a significant effect on its bottom line. Among US carmakers, Stellantis withdrew its 2025 financial guidance due to tariff uncertainty, while GM said that tariffs could cost the company up to $5 billion.Ford could see a lesser impact from tariffs than other companies because it makes 80% of the vehicles it sells to US customers at American assembly plants, more than any other manufacturer.Ford's stock has fallen almost 19% in the past year because of reduced vehicle sales and raging competition from Chinese electric car producers.Read the original article on Business Insider

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