Ford $F ( ▲ 0.62% ) remains optimistic about its long game—after declaring a net loss of $36 million in the second quarter and lowering its annual profit expectations due to the tariffs.
The details: The Detroit automaker announced on Wednesday that the import tariffs will likely eat into its adjusted annual operating profit by $500 million more than initially forecasted in May.
The levies are now expected to affect the company’s operating profit by $2 billion, compared to the $1.5 billion projected three months ago.
Ford projects its annual operating income to be $6.5 billion to $7.5 billion, short of the $7 billion to $8.5 billion forecast it suspended this spring.
The automaker took an $800 million hit on its Q2 operating income of $2.1 billion—though it attributes most of it to recalls and canceling its all-electric SUV.
Ford’s lower annual operating income projections come amid concerns among the Big Three Detroit automakers that the 15% import duties for Japan and the EU put them at a competitive disadvantage—given that they face a 50% tariff on steel and aluminum and a 25% tariff on many parts and finished vehicles imported from Canada and Mexico.
What they’re saying: "We've shared those (forecast) numbers with the administration. They've made it clear to us that Ford is the most American automaker, and it should not be disadvantaged in the long run, and in fact, we're having very constructive conversations with them to ensure a more level playing field. So, we are optimistic at this point, but we do have real work to do,” said Sherry House, Chief Financial Officer for Ford Motor Co. (via The Detroit News).
Why it matters: Ford’s revised profit outlook underscores the real and growing financial toll of import tariffs on the company—signaling broader headwinds for the automaker, which is increasingly squeezed between rising production costs, recalls, and global trade uncertainties.
Between the lines: Even though 80% of the vehicles Ford sells in the U.S. are built in the U.S. (more than any other automaker), the company’s tariff tab could surge.
The automaker faces duties on parts to build its popular F-Series trucks and SUVs.
President Trump has threatened to raise tariffs on Canada and Mexico this Friday.
"For us, parts is a big issue. We are optimistic that we'll be able to get some improvements here that will accrete to our bottom line,” added House.
Bottom line: Ford is signaling confidence in its long-term position—but in the near term, stakeholders should brace for margin pressure, elevated costs, and continued volatility tied to global trade policy.
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