Watch CBS News

Ford CEO: Steel, aluminum tariffs will cost automaker $1 billion

How China trade war could hit your wallet
How Trump's China trade war could hit your wallet 01:25

DETROIT - Ford CEO Jim Hackett says the Trump administration's tariffs on imported steel and aluminum will cost the company $1 billion.

Ford says the figure is a year-over-year increase from March through 2019.

"The irony is we source most of that in the U.S. today anyways," Hackett told Bloomberg television, explaining that the automaker gets most of its metals from domestic producers and that those companies have raised their prices. "We're in a good place right now, but if it goes on longer there'll be more damage."  

IHS Markit Senior Analyst Peter Nagle says other automakers will see the same cost increases. Eventually they'll have to raise prices of cars and trucks or reduce discounts to cover the added costs.

Harley Davidson outsourcing some motorcycle production to avoid tariffs 05:39

The U.S. slapped tariffs on imported steel and aluminum from some countries in March and added Canada, Mexico and the European Union in June. The administration justified the tariffs by calling foreign steel and aluminum a threat to U.S. national security.

U.S. steelmakers lobbied for those taxes on metal imports. Executives with steel giant Nucor this summer credited tariffs for contributing to higher prices and demand.

Ford and other automakers could face more headwinds if the Trump administration proceeds with proposed new levies on car imports. According to industry estimates, a 25 percent tariff on foreign-made vehicles could raise the cost of a typical new car sold in the U.S. by more than $4,000, an up to nearly $7,000 for imported cars and trucks. 

Separately, Federal Reserve Chairman Jerome Powell said Wednesday that U.S. trade tensions with China and other countries have yet to show up in higher consumer prices. But he warned that Americans could eventually feel the sting of a trade war.

"You could see retail prices moving up," he said in a press conference in Washington announcing the Fed's decision to raise its benchmark interest rate for the third time this year, while noting that "we're not seeing it yet."

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.