Ford Motor Co. said President Donald Trump's tariffs have made steel more expensive in the U.S. than any other market, escalating the company's criticism of the president's trade war.
"U.S. steel costs are more than anywhere else in the world," Joe Hinrichs, Ford's president of global operations, said Monday at an event marking the start of Ranger pickup production at a factory west of Detroit. He added that Ford is talking to the administration about the tariffs: "We tell them that we need to have competitive costs in our market in order to compete around the world."
Ford Chief Executive Officer Jim Hackett last month called on Trump's administration to resolve trade disputes quickly, warning that they would otherwise do more damage to the second-largest American automaker. He said the company sustained a roughly $1 billion hit to profit despite the fact that it sources most of its metals from the U.S.
Domestic hot-rolled coil -- the benchmark price for American-made steel -- has gained 28 percent in 2018 as the Trump administration implemented tariffs on imports. The levies helped push the price to about $920 a metric ton earlier this year, the highest in a decade.
Trump has portrayed his levies as key to getting other countries to accede to his trade demands. When celebrating a trade deal with Canada and Mexico to replace NAFTA earlier this month, he referred to those who have complained about tariffs as "babies." The president has also accused motorcycle manufacturer Harley-Davidson Inc. of using them as an excuse to move jobs overseas, though the company says the trade war has made it more difficult to keep some manufacturing in the U.S.
It's been a rocky road for relations between Ford and Trump. He repeatedly attacked the company on the campaign trail in 2016 for announcing its intention to move small-car production to Mexico. The automaker earned the president-elect's praise for dropping that plan weeks before his inauguration.
Trump has since answered a call by Ford and other carmakers for the U.S. to re-examine fuel economy standards set by President Barack Obama's administration. The company received this relief with some trepidation, clarifying that it wasn't asking for a rollback to rules and didn't want the federal government to battle states led by California over their tougher standards.
Trump's steel and aluminum tariffs aren't the only way in which his trade policies have had an effect on Ford. In August, the automaker scrapped a plan to sell a new model called the Focus Active in North America. Ford cited the U.S. imposing an additional 25 percent levy on vehicles imported from China, where the crossover will be built.
Chinese President Xi Jinping has gone tit-for-tat with Trump, matching his 40 percent tariff on imported vehicles. That's led Ford to reduce American exports to China, particularly of Lincoln models that it's trying to sell in the world's biggest auto market.
While Ford imports only a small number of vehicles into China, it's been struggling in the market. Sales there have declined in 14 of the past 15 months and plunged 43 percent in September, as trade tensions combine with a stale lineup and dearth of sport utility vehicles to put a drag on demand.
"We encourage all countries -- but especially the U.S. and China -- to work together," Hinrichs said. "We think it's in the global economy's interest to do so."
Business on 10/23/2018