Contrary to assertions by the Trump administration, recent tariff policies are placing significant strain on American automakers. Leading the charge is Ford Motor Co., a cornerstone of U.S. manufacturing.
Ford is the largest vehicle producer in America, assembling more cars domestically than any other automaker. Last year alone, the company produced 1.8 million vehicles and employed approximately 57,000 workers at facilities throughout the upper Midwest. As a historic American brand, Ford's operations in the Rust Belt were expected to benefit directly from the administration's trade measures.
However, the reality paints a different picture. This week, Ford reported tariff-related costs amounting to $800 million in the second quarter of 2025, coinciding with its first quarterly loss since 2023. The company anticipates that these tariffs will slash annual profits by around $3 billion. For reference, Ford achieved an operating profit of $10.2 billion last year, highlighting the severity of the impact.
In light of these challenges, Ford is actively seeking relief from the very tariffs intended to support its operations. Ford CEO Jim Farley mentioned in an interview with Bloomberg that executives are engaging with the Trump administration "every day, every week, every month" to address the "disadvantage" created by these tariffs.
This situation challenges the administration's narrative that tariffs do not adversely affect American-made products. Specifically, the 50 percent tariffs on steel and aluminum—essential materials for automakers—and the 25 percent tariff on imported car parts are significantly impacting U.S. manufacturers. General Motors has also reported tariff costs exceeding $1 billion in the second quarter.
While companies like Ford and General Motors have so far absorbed these expenses without increasing consumer prices, the mounting losses may force them to adjust. The Detroit Free Press indicates that industry analysts predict consumer vehicle prices could rise by 4 to 8 percent in the latter half of the year.
Additonally, Ford's extensive domestic manufacturing makes it particularly vulnerable to the administration's tariff strategy. As The Wall Street Journal reported, the administration's proposed agreements with Japan and the European Union introduce a reduced tariff rate of 15 percent on imported finished cars from these regions. Meanwhile, U.S.-based automakers continue to face higher tariffs on the raw materials and parts essential for their manufacturing processes.
Overall, the tariffs intended to bolster U.S. manufacturing are instead inflicting financial strain on the very industries they aimed to protect, suggesting a need to reconsider this approach to economic policy.
