The re-election of President Trump has had a noticeable effect on the way many CEOs are running their businesses. Programs to improve diversity, equity, and inclusion are being canceled, and seven-figure checks were sent to his inauguration fund by CEOs like Apple’s Tim Cook. The behavior from the Oval Office is mirrored by the rest of the administration, which is why it was a little surprising to see the CEO of a major company speak out against current US government policies. But that’s exactly what Ford President and CEO Jim Farley has done.
Speaking at a conference, Farley said that “President Trump has talked a lot about making our US auto industry stronger,” but that “so far what we’re seeing is a lot of cost and chaos,” reported Automotive News.
During the election, Trump promised to enact heavy tariffs on a wide range of imports from countries across the globe. Among those particularly targeted were Canada and Mexico. The two countries share borders with the US and, for many years, were joined in a free-trade association that encouraged US companies to set up factories in Canada and Mexico to take advantage of lower wages.
The US has had to pause some of these new tariffs almost immediately, and the proposed 25 percent tariffs against any Canadian or Mexican imports have been delayed for a month. But yesterday, the president imposed 25 percent tariffs on any imported steel or aluminum. When last in office, Trump also imposed tariffs on steel (25 percent) and aluminum (10 percent), igniting a trade war and cutting US steel imports by far more than domestic steel production was able to rise to meet it.
“Let’s be real honest: long-term, 25 percent tariffs across the Mexican and Canadian border would blow a hole in the US industry that we have never seen,” Farley said, pointing out that the tariffs would “give free rein” to OEMs that import their vehicles from Japan, South Korea, or Europe.
As the CEO of Polestar told Ars last week, the main thing automakers want is clarity. The last they want is chaos, where the rules have changed from one day to the next based on whim. At the conference, Farley had a similar message. “They need to understand there’s a lot of policy uncertainty here, but in the meantime, we’re scrambling to manage the company as professionals,” he said.