Ford Suspends Shipments of Vehicles to China Amid US-China Trade War

Ford Motor Company F has suspended shipments of several of its flagship vehicles to China due to rising challenges linked to the ongoing U.S.-China trade conflict and increased retaliatory tariffs on American-manufactured cars. The company has confirmed that the current trade climate has disrupted its export plans, prompting it to scale back shipments from the United States to China. Affected models include the F-150 Raptor pickup, Mustang sports car, Michigan-made Bronco SUV and the Kentucky-built Lincoln Navigator. 

Despite the vehicle shipment suspension, Ford will continue sending U.S.-manufactured engines and transmissions to China. The Lincoln Nautilus, produced locally in China, won’t be impacted operationally, though it still faces financial strain from the elevated tariffs. Per The Wall Street Journal, Chinese tariffs in response to U.S. import taxes have reached up to 150% on some vehicles. Ford shipped around 5,500 Broncos, F-150s, Mustangs and Navigators to China last year, far below its historical average of more than 20,000 vehicles annually.

The wider automotive industry is also feeling the impact of these tariffs. The Centre for Automotive Research estimates that a 25% tariff on U.S. auto exports could result in up to $108 billion in additional costs for automakers by the end of 2025. 

An internal Ford memo suggests the company may consider adjusting new vehicle prices in the United States if trade tensions persist. While roughly 80% of Ford’s U.S.-sold vehicles are made domestically, providing some protection, continued tariff pressure could ultimately affect its bottom line. Automakers are also dealing with import tariffs of at least 25% on steel and aluminium.

High Tariff to Further Strain F’s Shrinking Sales & Profits

Ford has already been struggling with stiff competition, pricing pressure and significant costs associated with new-generation EV development. After having incurred losses of $4.7 billion in its EV business in 2023, Ford’s loss from Model e widened to $5.07 billion in 2024. Discouragingly, the company expects segmental loss in the range of $5-$5.5 billion in 2025. The automaker’s full-year adjusted EBIT is forecasted between $7 billion and $8.5 billion compared with $10.2 billion in 2024. 

Notably, F’s weak guidance doesn’t even take into account any changes in policies from the Trump administration. These tariffs are expected to increase raw material costs and finally translate to a high cost of vehicles, thereby derailing demand and affecting the sales and profits of Ford.

Other Automakers Affected by the US-China Trade War

In China, Tesla, Inc. TSLA recently halted sales of its U.S.-manufactured Model S and Model X vehicles due to steep tariffs on American imports. China is TSLA’s second-largest market after the United States and its high import tariffs on U.S.-manufactured vehicles have made these models too costly to sell. If the tariff remains high, Tesla could experience a permanent drop in sales of Model S and Model X.

Rivian Automotive, Inc. RIVN is also feeling the strain from Trump’s auto tariffs. Despite its U.S.-focused supply chain, it still relies on global components. China’s export limits on rare-earth materials, which are critical for EV batteries and motors, have further complicated Rivian’s operations, driving up costs and threatening production.

Ford Stock Performance and Estimates

Ford shares have lost 25.2% in the past year, underperforming the Zacks Auto, Tires and Trucks sector’s decline of 4.6% and the Zacks Automotive - Domestic industry’s growth of 13%. 
 

The Zacks Consensus Estimate for F’s 2025 sales and earnings indicates a year-over-year decline of 4.92% and 29.89%, respectively. The Zacks Consensus Estimate for its earnings has moved down over the past seven days.
 

F stock currently carries a Zacks Rank #4 (Sell). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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