Posted on 05/06/2025 7:26:30 AM PDT by lasereye
U.S. companies are starting to put hard-dollar figures to the damage President Donald Trump's tariffs will do to their bottom lines as trade policy evolves and the economy shows signs of weakening heading into the summer.
Ford Motor (F) pulled its full-year profit guidance late Monday, after its solid first-quarter earnings were likely flattered as customers bought ahead of the expected tariffs. Ford said the administration's levies would likely add around $2.5 billion to its overall cost base
The hit to earnings, Ford said, would likely be around $1.5 billion, as some of the parts and semiconductors it needs for its vehicles are difficult to source from U.S.-based suppliers.
Last week General Motors (GM) slashed its 2025 profit forecast by around $3.7 billion and pegged its overall tariff exposure at between $4 billion and $5 billion.
Anderson Economic Group, the East Lansing, Mich., consultancy, estimated in a study last month that the current tariff regime could add as much as $12,000 to the cost of a U.S. vehicle, even with the exemptions and elongated time frames the White House unveiled last week.
The adjustments provide significant and beneficial softening of the cost impact of these tariffs, at least for U.S.-assembled vehicles," the study's lead author, Patrick Anderson, said.
"However, the cost is still substantial for most American cars and trucks. We do not expect consumers to absorb tariff costs that are still above $4,000 for many models, and above $10,000 for luxury vehicles imported from Europe and Asia."
Hot Wheels maker Mattel (MAT) , meanwhile, also scrapped its full-year profit guidance and said it was likely to pass on some of the expected $270 million in added costs to its customers.
Mattel, which imports around 20% of its toy products from China, said it would tame promotions and accelerate cost cuts companywide to absorb some of the added tariff burden and mitigate the expected spending uncertainty.
"Given the volatile macroeconomic environment and evolving U.S. tariff landscape, it is difficult to predict consumer spending and Mattel's U.S. sales in the remainder of the year and holiday season," the company said in a late Monday statement.
In an open letter to the White House last month, the Toy Association, a New York industry lobbying group, called for a "zero for zero" policy on tariffs, citing "the essential role toys play in child development, learning, and creative play."
They want to make deals with our trading partners but so far there are zero actual deals.
The stock market's having a bad day today - although we can partly blame that on Powell.
Well, Ford must be getting too many parts for their vehicles from non0ASmerican sources. I guess Ford is the one that needs to bring back the domestic sources that they helped destroy along with their American workers. Oops, bad on Ford, and you expect me to feel bad about Ford?
Ford is hit so hard it’s stock is up 4%.
I see you simply take at face value the part about adding $12K to the price of a car. I am not convinced it will add that much, especially with the new exemptions etc. Sounds like classic globalist scaremongering to me.
Bingo
Whoever thought government theft could be so bad?
Answer: smart economists.
Maybe you can explain how bad trade deals help the economy in the long run.
The stock market’s having a bad day today
The market has been yoyoing for a few months the tech stocks are up down and repeating the market is always in a panic mode
Those in the know keep saying it’s a long term when dealing with stocks for a reason.
With or without pressures from tariffs, the price of new vehicles is ridiculous.
Yes it does
If that is the case, then I have absolutely zero sympathy for them.
Until a year ago, Hot Wheels cars have been $1.00 for over 50 years. It has been an amazing run.
It sounds like you're for increasing the cost of a car by $12K.
Ford can't bring back domestic sources of parts.
“Ford, Mattel join growing list of U.S. companies facing profit hit from tariffs”
too bad, so sad ... companies like these have been profiting
by screwing U.S. workers for too long by having their products manufactured offshore by slave labor ...
Did they cry about the losses they had from EV sales?
That seems unlikely. The short term issues are obvious. If a business is over reliant on foreign materials and labor… now it time for them to rethink some things or eat it. Sure they can pass on some costs to the consumer , but it is still the consumer that will dictate if thats a good strat. It seems to me like large multinational companies failed to see what might happen to them if tariffs were ever increased. Politicians for a really long time were fine with status quo. Trump was elected because folks were sick of status quo. Profits from a first Q 2025 are not really a direct result of tariffs just implemented either. Cheap chinese toys are going to be hit sure…. But Fords been run like trash for a long long time.
Did I say bad trade deals help the economy in the long run?
That is NOT going to happen.
Sales would collapse.
International suppliers will be compelled to eat at least 50% of the tariff.
If they do not, 100% of their sales will disappear!
The automakers will either pass on $12K in costs, or if they can’t pass it on to the consumer, shut down production of some models. Paying $12K more for a car and/or layoffs are a screwy way of helping workers.
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