Ford Motor Considers Price Hike on New Vehicles Amid Trump’s Auto Tariffs

Ford Motor Company is contemplating a potential increase in the prices of its new vehicles in light of the ongoing auto tariffs imposed by President Donald Trump. A memo circulated to dealers on Wednesday and subsequently reviewed by Reuters revealed the automaker's intentions to adjust pricing on new models produced from May onwards, should the tariffs remain in effect.

Pricing Adjustments and Discounts

Ford, based in Dearborn, Michigan, had previously initiated a program offering substantial discounts across its entire lineup, which started earlier this month and is set to continue until June 2. However, the memo indicated that the pricing on new models produced in May and beyond may be subject to change. The memo was first reported by Automotive News.

Dynamic Tariff Situation

A Ford spokesperson emphasized the dynamic nature of the tariff situation, stating, "Customers will have a lot of choices, and we have plenty of inventory to choose from through June 2. The tariff situation is dynamic, and we continue to evaluate the potential impact of tariff actions." The spokesperson also noted that if prices were to change on vehicles produced in May, customers would likely not see an increase until early July.

Industry Response

In an effort to mitigate consumer concerns regarding potential cost inflation at dealerships due to the tariffs, both U.S. and foreign automakers have proactively offered price assurances and substantial discounts. While these short-term measures have led to a surge in sales, U.S. automakers have privately cautioned lawmakers about the necessity of drastically raising prices if the tariffs remain in place.

Implications for Pricing

Ford executive Andrew Frick, in the memo, highlighted the anticipated need for vehicle pricing adjustments in the future, particularly with respect to May production, in the absence of material changes to the articulated tariff policy. Notably, the memo also stated that Ford would not increase the sticker price on any vehicle currently in inventory at Ford and Lincoln dealers.

Financial Impact

Furthermore, an analysis conducted by the Center for Automotive Research, published earlier this month, projected that Trump's 25% tariffs on automotive imports, which were implemented on April 3, will escalate costs for U.S. automakers by approximately $108 billion by 2025. Despite the potential financial burden, Ford is positioned favorably to withstand the impact of the tariffs, as it manufactures around 80% of its U.S.-sold vehicles domestically.

Potential Modifications to Tariffs

In a related development, President Trump recently floated the idea of considering modifications to the auto-related tariffs, suggesting the possibility of granting exemptions on existing levies. This statement has raised speculation about potential changes to the current tariff landscape and its implications for the automotive industry.