Ford's Jim Farley, Red Bull Racing's Laurent Mekies on F1 Partnership (FULL)

Ford CEO Jim Farley and Red Bull Racing CEO Laurent Mekies joined Bloomberg's Matt Miller from the Detroit Auto Show. They discuss their partnership, the evolution in Formula 1 technology, and what Trump-era policies mean for the future of auto manufacturing.

Ford Motor Co.’s top executive said there’s urgent need to update the North American trade agreement critical to the region’s automotive industry, a sharp contrast to comments by President Donald Trump this week expressing indifference toward brokering a new deal.

“We built our entire vehicle business as an industry between Canada, Mexico, and the US,” Ford Chief Executive Officer Jim Farley said Thursday in a Bloomberg TV interview. “We have to get this revised.”

The comments underscore the importance of the pact to US automakers, which until Trump imposed new tariffs on imported vehicles and parts last year could ship their products and components between the US, Canada and Mexico duty-free. Trump earlier this week said he sees as the agreement as “irrelevant,” suggesting a renegotiation of the deal due this year may be thorny.

“We could have it or not. It wouldn’t matter to me,” Trump said earlier this week of USMCA. “I don’t really care about it.”

Farley has previously said the administration’s trade deal with Japan — which lowered tariffs to 15% — gave Toyota Motor Corp. a $5,000 to $10,000 cost advantage on SUVs over Ford, despite Ford building its SUVs in the US.

Revising the trade agreement is on a “long list” of issues the company needs to work through with Trump’s administration, Farley said, in addition to more relief from tariff costs and keeping Chinese cars out of the US.

“The administration’s been great to work with, they always answer the phone,” Farley said in the interview. “There’s always a lot of big topics for the car industry because it’s so important for our country.”

Farley said he discussed some of Ford’s needs with Trump when the president toured the automaker’s F-150 truck factory in Michigan earlier this week. Farley said he warned the president of the threat posted by Chinese automakers, which are rapidly grabbing market share in Europe with gas and electric vehicles with low prices that Farley said is the result of Chinese government subsidies.

“They pose a lot of threat to labor locally, they have huge subsidies from the government that they’re exporting,” Farley said. “As a country, we need to decide what is a fair playing field.”

Ford also needs more relief on tariffs, especially on aluminum, which the automaker uses for the body panels of its top-selling F-Series pickups.

“We’ve made progress on mitigating some of the tariffs, but we have more work to do,” Farley said. “We have a high exposure to aluminum.”

Farley praised Trump’s moves to zero out penalties for not meeting fuel economy regulations, which enables automakers to sell more fuel-thirsty SUVs and trucks without balancing those sales with electric vehicles.

Farley has called that regulatory relief a “multibillion-dollar opportunity.” He says that is helping to boost Ford’s stock, which is up nearly 40% over the last year.

Those regulatory changes “are really welcome frankly, and we’re seeing that play out really in our business,” Farley said. “Part of the reason why our valuation’s increasing is because people understand we can build more profitable vehicles now.”

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