Ford lowers its projection for Trump's tariff impact.
Ford and General Motors (GM) are both grappling with the impact of U.S. tariffs on their operations and profits in 2025.
In the second quarter of this year, Ford reported an operating loss of $1.3 billion, a significant contrast to a profit of $1.8 billion in the same period last year. The company's revenue increased by 5% to $50.2 billion, but the net loss of $36 million was attributed to the tariff-related costs.
Ford's electric models, the Explorer and Capri, are being produced in Cologne, Germany. However, due to weaker demand than originally planned, production will be scaled back as of the end of 2024. The company has agreed with the works council on job cuts in Cologne.
The expensive recall played a role in Ford's losses in the last quarter. Additionally, Ford has felt the impact of a 50% increase in import tariffs on aluminum and steel. In the last quarter alone, costs at Ford increased by $800 million.
Ford CFO Sherry House stated that tariffs on imported cars from Mexico and Canada remained higher for longer than expected. As a result, Ford has revised its forecast, now expecting a $500 million higher impact than previously anticipated. For the full year, Ford now expects an operating profit between $6.5 and $7.5 billion, down from $7.0 to $8.5 billion in February.
General Motors (GM) faces an even greater tariff impact, with a $1.1 billion hit reported in Q2 2025 alone. GM anticipates total tariff-related costs reaching up to $5 billion in 2025, reflecting its heavier reliance on vehicles imported from countries subject to tariffs, notably compact cars from South Korea.
In comparison to Ford, GM's profits have been more heavily burdened by tariffs. The company has announced plans to invest $4 billion in domestic manufacturing to offset these costs and improve resilience.
In summary, while both automakers are significantly affected, GM's profits and operations appear more heavily burdened by tariffs due to greater import exposure, whereas Ford's domestic production allows somewhat better buffering but still incurs substantial costs.
The White House did not initially respond to a request for comment on the automakers' numbers.
[References] 1. Ford's profits and operations in 2025 significantly affected by U.S. tariffs 2. General Motors anticipates $5 billion in tariff-related costs for 2025 3. GM to invest $4 billion in U.S. plants to reduce import reliance 4. Ford's struggles with electric models in Cologne
The U.S. tariffs have created substantial costs for the finance sector, impacting not only Ford's operations and profits in 2025 but also extending to other business sectors like technology, as evidenced by General Motors anticipating up to $5 billion in tariff-related costs this year. Ford's CFO, Sherry House, announced revisions in the operating profit forecast due to tariffs, expecting a higher impact than initially anticipated. Meanwhile, General Motors intends to offset these costs by investing $4 billion in domestic manufacturing.
