Mark Fields said that a 35% tariff on car import from Mexico proposed by the president-elect would have a devastating effect on the car industry and the U.S. economy as a whole.
Ford CEO Mark Fields spoke about president-elect Donald Trump for the first time since the election during this week's Los Angeles Auto Show. Fields welcomed Trump in his new role and said that his company was looking forward to working with Trump's new administration, despite the long feud between the company and the president-elect in the past months.
During the campaign trail, Trump repeatedly criticized Ford (NYSE: Ford Motor Company [F]) for its decision to open a new production plant in Mexico and create 2,800 jobs there. The president-elect promised to bring as many manufacturing jobs back to the United States as possible and in order to do so he would impose a 35% tariff on all imports of cars from Mexico to the U.S.
"They're going to make cars and trucks and parts and send them into the United States. We get no jobs. We get no taxes. No tax comes right across the border," Trump told CNN, as reported by Detroit Free Press.
Ford, in turn, sharply opposed Trump's claims and said that opening of a production plant in Mexico would not steal any jobs from the U.S. In a tweet from 26 September, Ford added that the company was contributing to the U.S. economy in terms of jobs and the number of vehicles produced more than any other automaker in the country.
Ford has more hourly employees and produces more vehicles in the U.S. than any other automaker. pic.twitter.com/k15cqknsvX— Ford Motor Company (@Ford) September 27, 2016
In his keynote speech at Los Angeles Auto Show, Fields mentioned again that he sent a congratulatory note to Trump on the elections day and welcomed his new administration, as the feud between the two was known to the public. However, Ford CEO emphasized that he still didn't support Trump's proposals to control import from Mexico by introducing large a 35% import tax, as imposing stricter tariffs on a single country goes against the rules of the World Trade Organization that the U.S. is part of. Fields went even further by saying that in case the 35% tariff for Mexican imports would be imposed, the consequences would go much further than solely affecting Ford's manufacturing activities.
"A tariff like that would be imposed on the entire auto sector, and that could have a huge impact on the U.S. economy," Fields said.
The only aspect that Ford is ready to work with Trump together is the Trans-Pacific Partnership, a 12-countries trade agreement, that, according to the automaker, lacks strict rules against currency manipulations. Detroit Free Press said that Ford was going to have a hard time negotiating the Mexican trade issue with the president-elect, as it seems like Trump might pull the United States out of the North American Free Trade Agreement with Mexico and Canada altogether.
"I continue to be convinced that the right policies will prevail, because we all share the same objective, which is a healthy and vibrant U.S. economy," said Field, as reported by Detroit Free Press.
Next to that, Fields announced during the LA Auto Show that Ford planned to become the first automaker to import cars to the United States from India. The company plans to supply first Indian-produced Ford EcoSport SUVs to the United States already in 2018, emphasizing that Ford has been successfully importing Indian-produced vehicles to more than 100 markets since 2013.
It's yet to see how Trump will react to Ford's global activities that go far beyond Mexico but Field's worries about the future of the U.S. car industry and the economy as a whole are shared by many of the industry experts saying that a 35% tax is unlikely to bring any jobs back to the U.S.
"It's really unfortunate when politics get in the way of the facts," Ford CEO told CNN in an interview.