President Donald Trump spent the 2024 campaign promising he’d help the U.S. auto industry and its workers.
Now, just weeks into Trump’s second presidency, the leader of an iconic Detroit carmaker is warning that Trump policies could slam the industry, leading to layoffs and broader economic damage.
During a Tuesday appearance in New York City, Ford CEO Jim Farley focused on two big threats to U.S. auto manufacturers and their suppliers: Trump’s vow to withdraw support for electric vehicles and his enthusiasm for big, broad tariffs, especially against Canada and Mexico.
“Jobs will be at risk” if Trump ends the EV support, Farley said, according to an account in the Detroit News.
As for those tariffs, Farley said, they could “blow a hole in the U.S. industry that we’ve never seen.”
CEOs aren’t always correct, and they’re certainly not always looking out for the best interests of their workers. But the admonition from Farley, who was speaking at the Wolfe Research Auto, Auto Tech and Semiconductor Conference, echoes what labor unions and manyanalysts have been saying about the industry and how it will fare if Trump makes the changes he has promised.
Recent federal support for EVs has helped spark an explosion in factory construction for the vehicles and their component parts, in a region stretching from the upper Midwest to a new “battery belt” in the South. It also has fueled rising EV sales, allowing the “legacy” U.S. automakers like Ford and General Motors to make up some of the ground they’ve lost to competitors in China, where the government has spent more than two decades nurturing its own EV industry.
But government subsidies in the U.S. have largely come through the Inflation Reduction Act, the sweeping 2022 Democratic climate legislation President Joe Biden signed into law. And Trump is not a fan — of clean energy policies generally (he has famously called climate change a “hoax”) or of federal EV policies (which he says are forcing the industry to make unappealing, unprofitable cars).
Trump on his first day in office signed a (mostly symbolic) executive order to end what he calls the “EV mandate.” That suggests he’d be inclined to sign legislation repealing the 2022 law and its EV subsidies, which is something his transition team reportedly urged and that Republican leaders in Congress are actively discussing.
Farley said that would be a big mistake.
“We’ve already sunk capital — even though we’ve rationalized it — in battery production and assembly plants all through Ohio, Michigan, Kentucky and Tennessee,” Farley said. “And many of those jobs will be at risk if the IRA is repealed.”
Farley was speaking on the same day Trump imposed 25% tariffs on aluminum and steel, and a little more than a week after Trump imposed ― and then quickly withdrew ― 25% tariffs on all goods from Canada and Mexico.
Farley said the new metal tariffs are likely to show up as higher prices in Ford cars, even though the company already gets most of its steel from within the U.S.
“Our suppliers have international sources for aluminum and steel, so that price will come through,” Farley said.
The CEO was careful to say he appreciated Trump’s pledges to help the U.S. auto industry.
“President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation to the U.S., and if his administration can achieve that … it would be one of the most signature accomplishments,” Farley said.
But “so far,” Farley said, “what we’re seeing is a lot of cost and a lot of chaos.”
He seemed particularly concerned about the prospect of restarting the big tariffs against Canada and Mexico, because the legacy U.S. carmakers rely so heavily on supply chains — and sales — crossing both the northern and southern borders.
If anything, Farley said, heavy tariffs targeting Canada and Mexico could end up helping Ford’s foreign competitors.
“Let’s be real honest: Long term, a 25% tariff across the Mexico and Canada borders would blow a hole in the U.S. industry that we’ve never seen,” Farley said. “Frankly, it gives free rein to South Korean, Japanese and European companies that are bringing 1.5 million to 2 million vehicles into the U.S. that wouldn’t be subject to those Mexican and Canadian tariffs. It would be one of the biggest windfalls for those companies ever.”
Farley plans to meet with members of Congress on Wednesday, according to the Detroit Free Press. It’s not clear whether he’ll be meeting with anybody in the White House, including Trump adviser Elon Musk.
Musk is also the CEO of Tesla, the U.S.-based company that sells the most EVs. But Musk has not pushed to keep federal EV support in place.
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On the contrary, Musk has said rolling back government support for EVs now would probably not hurt Tesla, and might even help by giving it an advantage over legacy carmakers — which, among other things, have the kind of unionized workforces that Musk has fought to prevent at his company.