Steel, aluminum tariffs will cost company $1B: Ford CEO

SHARE Steel, aluminum tariffs will cost company $1B: Ford CEO
ap18253191436231_e1537995765113.jpg

Tariffs imposed by the Trump administration on imported steel and aluminum are costing Ford Motor Co. $1 billion, hurting the bottom line and raising the possibility of price increases across the automotive industry. | AP file photo

DETROIT — Tariffs imposed by the Trump administration on imported steel and aluminum are costing Ford Motor Co. $1 billion, hurting the bottom line and raising the possibility of price increases across the automotive industry.

Ford CEO Jim Hackett revealed the number during a television interview Wednesday, and the company said the figure is a year-over-year increase from March through 2019.

Ford buys most of its metals from U.S. producers, which have raised prices this year due to the tariffs on foreign competitors, the company has said.

Other automakers that produce vehicles in the U.S. are experiencing the same price increases, said IHS Markit Senior Analyst Peter Nagle. While they may be absorbing the increased costs at present, eventually they’ll have to pass at least some of the costs on to customers, he said.

“They’re maintaining pricing discipline now just because the consumer can’t support those higher prices,” Nagle said. But if the tariffs stay in place for the remainder of Trump’s term, “obviously some of those costs would have to start being passed along to the consumer here.”

Ford wouldn’t comment specifically on price increases but said it will “continue to make the necessary decisions to remain competitive.”

The Trump administration slapped a 25 percent tariff on imported steel and 10 percent tariff on aluminum from some countries, including China, in March. It added Canada, Mexico and the European Union in June. The administration justified the tariffs by calling foreign steel and aluminum a threat to U.S. national security.

Ahead of the tariffs, U.S. metals producers raised prices as companies tried to buy before the tariffs went into effect, Nagle said. He said steel prices are up 25 percent since the tariffs began, and he expects that to rise to near 30 percent next year.

Automakers would either raise sticker prices or cut discounts on new cars, trucks and SUVs, Nagle said. The administration also is studying 25 percent tariffs on imported vehicles, also based on national security concerns. Those tariffs would raise prices, slow auto sales and could cut U.S. economic growth in half by 2020, Nagle said. Other countries also are likely to retaliate on imports from the U.S.

“You can’t have a trade war without automotive,” he said.

AP Economics Writer Paul Wiseman contributed from Washington, D.C.

The Latest
State Sen. Darren Bailey had been seeking Trump’s endorsement for months. The downstate farmer met with Trump last year and attended a fundraiser in April in which he snapped a photo with the former president.
Offense has scored three runs in its last three losses to the Orioles, who entered Saturday’s game with a 4.10 ERA - 12th in the AL
“The risk to residents of suburban Cook County remains low, but we want individuals to be aware of the signs and symptoms of monkeypox so that they seek medical care if they develop,” said Dr. LaMar Hasbrouck, CCDPH chief operating officer.
Hoerner has set career highs in RBI and home runs already this season.
The players are Andrew Vaughn, Jose Abreu, Tim Anderson, AJ Pollock and Luis Robert