Tariffs and Their Impact on Pricing

President Trump’s administration has introduced a 25% tariff on all imported vehicles, effective May 3, 2025. Additionally, cars assembled in the U.S. with more than 15% foreign components will also face the new duty.

Farley stated that while Ford manufactures around 80% of its vehicles domestically, the company still depends on select international components. This reliance could drive up production costs and, eventually, lead to higher consumer prices.

To help offset the burden, Ford has extended its “employee pricing” program to all customers through July 4, 2025—a strategy aimed at keeping prices competitive during a time of uncertainty.

Call for Comprehensive Tariff Policy

Farley also urged for a more balanced trade policy, noting inconsistencies in how the tariffs are applied. For instance, imports from Japan and South Korea remain largely unaffected, while goods from Canada and Mexico are subjected to the full 25% rate.

He recommended a uniform tariff framework that would ensure fairness and predictability across the global automotive supply chain.

Industry-Wide Implications

According to Farley, the broader auto industry is watching closely to see how manufacturers will absorb or pass along the increased costs. The uncertainty is causing concerns regarding supply chain adjustments and long-term pricing strategies.

Despite these challenges, Ford has recorded double-digit sales growth since March 2025. The company attributes this to proactive steps like the extended pricing campaign and its longstanding commitment to domestic manufacturing.