When President Trump announced this week that he would ease some tariffs on American automakers, the top executive at Ford Motor Co. said that he "welcomes" the move and that American consumers didn't need to worry about the company raising prices until the summer.
"Ford is the most American company," CEO Jim Farley told NPR on Wednesday. "We make 80% of what we sell in the U.S. here. And so the tariffs, for us, are a bit different than the [auto] industry."
But Ford is not fully exempt from feeling the pain. The Trump administration's move doesn't mean tariffs on auto parts and automakers are going away. The executive actions give companies more time to relocate production to the U.S. and reward domestic manufacturers, while "providing [a] runway" to those who need time to invest in domestic plants.
"If they can't get parts, we didn't want to penalize them," Trump told reporters at the White House on Tuesday.
Even then, Farley said, it's challenging to find crucial parts in the United States.
"They're giving us kind of an exemption for carpets, washers, fasteners, wiring loom, stuff that honestly we can't even get in the U.S.," Farley said. "Also stuff that, frankly, if we made here, it would make the car a couple thousand dollars more expensive, which is too expensive for what we think."
On Tuesday, Treasury Secretary Scott Bessent told reporters that Trump's goal is to bring more auto manufacturing to the United States. "So we want to give the automakers a path to do that quickly, efficiently and create as many jobs as possible," he said.
Speaking to All Things Considered host Mary Louise Kelly, Farley said that the balancing act is between American jobs and affordability.
Farley added that the remaining tariffs will have "a really big impact on our industry," which imports about 8 million cars.
"I think it's inconceivable to say that car prices won't go up," he said.
This interview has been lightly edited for length and clarity.
Interview highlights
Mary Louise Kelly: You're saying Ford already makes 80% of your cars in the U.S. That's more than any other U.S. automaker. I want to ask about the parts, though, because a lot of the parts you use to build those cars do come from other countries, Mexico and so on. Will you be shifting to U.S.-based suppliers?
Jim Farley: During [Trump's first term], we negotiated where even a part made in Mexico could have a lot of U.S. content in it. So, visualizing the F-150, [about 60%] … of the parts come from the U.S., and the rest are coming from those other countries. But they have a lot of U.S. content as part of that.
Kelly: But I guess the central question here, if the administration's stated goal with easing these tariffs for now is to give automakers, like you, time to shift production, how do you decide whether or not to do so when the tariffs themselves are a moving target, when President Trump may change his mind again in two days?
Farley: So what the Trump administration did to make it simple is they gave all the automakers — Ford's in a different spot, as I said — about a 15% leeway on parts that are non-USMCA [United States–Mexico–Canada Agreement] or non-U.S.
Kelly: So does that stuff stay overseas? You'll continue getting that from overseas?
Farley: No. I mean, we'll continue to do the math and aggressively move localization. But the one thing we have to balance is affordability. The F-150 is $800 a month already and is America's bestselling vehicle. Do we want to make that $850 a month? You know, that's the balance between affordability and making 100% of the parts here or, you know, keeping it as is.
Kelly: Are the prices of our cars about to go up? Will prices still have to go up, even with this, at least for now, scaling back of some of the tariffs?
Farley: I think it's inconceivable to say that car prices won't go up. Why? Fifty percent of all vehicles bought by Americans are imported, and those imported cars will get a 25% tariff now. That is literally $5,000 to $10,000 a vehicle. So, for the importers, and actually some of those companies are local companies, and some of our competitors that are domiciled in the U.S., and they have big decisions to make because their tariff bill will be very large compared to Ford.
Kelly: And how about it for you at Ford?
Farley: We only import about 10% or something like that. And so for us, we have 6% to 10% margins, 25% tariff on the parts that we don't build in here. Like 20% of our vehicles, you know, is billions. But we can offset that, and it depends on how our competitors act. Will the overseas importers increase prices and allow us to gain market share and therefore build even more here and be able to more than offset that in terms of the pricing we would have to take? I don't know. It will all come down to this summer, when those increased prices may or may not happen. And for deciding what do we do about that competitive dynamics. So far, our sales are going up, so I don't know what will happen.
Kelly: So I'm trying to pin you down on this. If the basic question is, are Ford prices going to go up? It sounds like the answer is we don't quite know yet because there's so much uncertainty in your industry.
Farley: I would say that's the right answer. We announced today — actually, I can announce it right now — that we're extending employee pricing through July 4. We want to enter this period of uncertainty by reassuring Americans that if you buy a Ford, you don't have to worry about that at least through July 4. And we're just going to have to see how the competitors react after that.
Kelly: Last thing, Mr. Farley, I know that you have spoken directly to the president about these tariffs. What did you learn from those conversations?
Farley: Well, what I learned is that I think he is very committed to building more jobs like these in America. I mean, these are the best of the best, you know, hourly jobs you can find in America. He's very committed to that. But I think the issue that we all have to work through together is how fast can that change and what will be the pricing and the affordability that we can manage through that transition.
Kelly: Would more predictability be useful for your business?
Farley: Well, sure. But these are complicated topics like tariffs. And as I said when this came out a couple months ago, cost increases are not great for any industrial company. On the other hand, we have committed to the U.S., and we want to expand jobs in the U.S. And so it's a balancing act between affordability and these great jobs. And I think I would just say there's no quick answer here. This is a long-term policy change, and we have to work together through it, even the most American companies like Ford.
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