Ford CEO Warns Trump’s Tariffs Could Destroy The Auto Industry

The CEO of the Ford Motor Company is sounding the alarm bells about Donald Trump’s looming tariffs with Canada and Mexico, and he’s warning that these tariffs could completely cripple the auto industry. The tariffs will obviously raise prices, but the CEO is warning that the prices could end up being so high that millions of Americans could be completely priced out of owning a car in the near future. Ring of Fire’s Farron Cousins discusses this latest warning.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Jim Farley, the CEO of the Ford Motor Company, one of obviously the oldest automobile companies here in the United States, and one of the largest, warned a group of investors this week that Donald Trump's tariff plans for both Canada and Mexico could completely cripple the automobile industry here in the United States. And not just in terms of like, oh, no, we can't build cars anymore. We're talking about massive unemployment. We are talking about putting the price of automobiles so high because of the tariffs that millions of people suddenly become priced out of automobile ownership altogether. And then of course, people not being able to afford cars is gonna have ripple effects through the economy. It's gonna cause people to not be able to get to work. It's gonna cause all of these little Jiffy Lube places that love to pop up everywhere, fewer cars on the road, fewer people needing oil changes, or tires or brakes or whatever it is.

Yeah, ripple effects throughout the economy as a whole if these tariffs go into place for the long term. Here is what Farley told the group. This was the Wolf Research Investment Conference, and he said, quote, so far we've only seen a lot of cost and a lot of chaos from Trump in his second term. A lot of cost and a lot of chaos, and it's only been three weeks, and he then gets down to the heart of the matter. There's no question that tariffs at a 25% level from Canada and Mexico, if they're protracted, would have a huge impact on our industry with billions of dollars of industry profits wiped out and an adverse effect on the US jobs. Let's be real honest, long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the US industry that we've never seen.

Frankly, it gives free reign to South Korea, Japanese, and European companies that are bringing one and a half million to 2 million vehicles into the US that wouldn't be subject to those Mexican and Canadian tariffs. It would be one of the biggest windfalls for those companies ever. Now, obviously for him, that's also a little bit self-serving, right? Like, hey, you're gonna let all these other people like take over the market and Ford's gonna go under. So yeah, his financial future is also riding on this, but more importantly, the financial future of potentially up to millions of people in this country is also riding on it. Because when there are mass layoffs in one particular area, right, if we see two to 3000 people, even two to 300 people in a small city where the manufacturing takes place, lose their jobs, that has the ability to wipe out the entire community.

I mean, it's a trope that's used in old movies all the time. Like, well, this used to be be the factory town, but when the factory shut down, the workers left, and then the economy. You know, all the businesses shut down and it becomes a ghost town. It's happened throughout American history and it could happen again here. That is what he is warning about even if it is a little bit self-serving. We're already two weeks into Donald Trump's 30 day pause on these tariffs of Canada and Mexico. He mentioned in his pre SuperBowl interview this past weekend with Bret Baier that he's not happy with the concessions that both Canada and Mexico have made. I think he realized he probably got hosed on the deal, and now he says, I'm gonna change it.

He literally said, I'm going to change it in that interview with Bret Baier. So we don't know what the future holds. We do know it's causing chaos in the stock market. We do know it's causing chaos at these businesses. They're not bringing in new people because they don't know if they're gonna even need new people two weeks from now. Trump has brought cost and chaos, as Farley said, to not just this industry, but to industries all over this country.