Consumers and automakers have been bracing for the impacts of President Trump’s tariffs despite the Commander-in-Chief claiming they will help the American economy.
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Economists have warned the tariffs will most certainly increase the prices of cars for consumers and potentially hurt the finances for automakers. It’s still unclear how much prices may increase or how long the impacts will be felt for shoppers and businesses, but at least one automaker has addressed the tariff issue head on.
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Ford’s Mixed Results
Ford posted better-than-expected first quarter results, but pulled its full-year guidance amid concerns the auto tariffs could significantly impact the bottom line, according to Yahoo Finance. In fact, Ford officials have estimated tariffs could add between $1.5 billion and $2.5 billion to its costs this year.
As you might expect, the comments from Ford officials led to some uncertainty and choppy times on Wall Street for the automaker’s stocks. While that may be troubling for investors, there are still signs of hope for Ford stocks.
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Automaker Adaptability
Andrew Lokenauth, a consumer and finance expert, said Ford leaders have previously shown they can adapt to tough times.
“The fact that Ford suspended their earnings guidance tells me they’re feeling pretty uncertain about their ability to predict future performance — and the market hates uncertainty,” he said. “But here’s something most people miss: automotive stocks tend to be pretty resilient over the longer term if the company has strong fundamentals.”
Long-Term Concerns
Chris Heerlein, CEO of REAP Financial, agreed that Ford’s resilience is likely to help its stocks move past any short-term market volatility.
“Beyond Ford, many businesses are facing similar tariff-related issues, which could result in higher consumer prices and slowdowns in spending,” Heerlein said. “With the holiday season ahead, the market will be watching closely to see how these cost increases affect consumer behavior and company performance.”
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Sources
Yahoo Finance, “Ford stock choppy after automaker pulls guidance, citing $1.5B tariff impact”
Andrew Lokenauth, AndrewLokenauth.com
Chris Heerlein, REAP Financial
This article originally appeared on GOBankingRates.com: Ford Says Tariffs Will Add $2.5B to Costs This Year — Could Its Stock Take a Hit?
