Ford says tariffs put $900 million dent in earnings: How Trump govt’s last-minute rule change hit automaker
According to the BBC, automaker Ford said on Tuesday (local time) that it had to pay $900 million more in customs duties than expected last year due to a last-minute change made by the US President Donald Trump administration to the tariff easing program.
The tariff reduction program is designed to help auto companies offset tariffs on imported goods, according to the report. It allowed companies that import auto parts but assemble vehicles in Washington to apply for loans to reduce tariff costs. But a last-minute change to the rule only increased Ford’s costs.
Has Ford been hit by Trump’s tariff plans?
In December 2025, Trump administration officials notified the automaker that the aid policy would take effect later than initially proposed. Because of this delay, Ford received less credit than he expected. Jim Farley, the automaker’s Chief Executive Officer (CEO), said the company paid approximately $2 billion in customs duties in 2025, which is almost double what he expected. Farley blamed high tariff costs on the unexpected change in tariff credits.
The higher-than-expected tariff bill on Ford underscores the ongoing uncertainty automakers are grappling with as they try to manage rising import duties and push the government for aid or exemptions.
Ford is moving away from electric vehicle production
Separately, Ford previously announced that it took a $19.5 billion hit after the company decided to move away from electric vehicle (EV) production. These expenses also played a significant role in the company’s $11.1 billion net loss in the fourth quarter. The company follows a calendar year financial reporting cycle.
The automaker said it was backing away from plans to produce large electric vehicles, citing regulatory changes under the Trump administration and weak demand. The company said the business case for moving heavily into EV production, particularly large-size EV models, was “eroding.”
Instead, the company planned to invest in the production of profitable hybrid and gas-powered vehicles and smaller, more affordable EV models.
Ford’s decision to change course comes after General Motors made a similar announcement. In October 2025, the company announced a plan to roll back EV targets due to reduced demand, adding that it would take a $1.6 billion hit.
Ford quarterly results
The auto giant reported its biggest quarterly earnings losses in four years, according to a CNBC report. The results were announced on Tuesday (local time). However, the company stated that it believes 2026 will be the year of recovery. The automaker missed earnings targets, mostly due to the hit from unexpected tariff costs. It was also expected that some overdue loans would be received. As a result, Ford’s fourth-quarter earnings (EBIT) fell from the expected $7.7 billion to $6.8 billion.
Ford’s CFO Sherry House also said earnings were hurt by fires at the Novelis aluminum plant in New York last year. The plant, which supplies aluminum to Ford’s highly profitable F Series pickup trucks, is not expected to fully reopen until mid-year, impacting production and profits.
Ford lags behind BYD in global sales for the first time
According to Bloomberg, the company suffered another blow after China’s BYD overtook Ford in global sales for the first time. The US automaker’s global vehicle shipments fell nearly two percent last year to 4.4 million vehicles; this was below BYD’s sales of 4.6 million. This means BYD has now become the world’s sixth-largest automaker, moving ahead of Ford in the global rankings.
Although Ford’s sales have increased in the United States, the company has lost market share in Europe and especially in China, where local brands such as BYD, Xiaomi and Geely are winning customers by offering more affordable and technology-focused electric vehicles, while foreign companies such as Ford are losing sales.
