Ford Motor Co. would feel a "significant impact" if the Trump administration imposes a tariff on cars, engines, and other automotive components it imports from Mexico, a top executive has told investors.
Joe Hinrichs, Ford's president, spoke at the UBS Industrials and Transportation Conference in New York, Bloomberg reported.
"If we were to see 5% and then rising tariffs on auto parts and vehicles from Mexico, it would have a significant impact on the industry, ourselves included," Hinrichs said. "The core issue is not a trade issue, it's illegal immigration or immigration in general. But trade and tariffs get caught up in this topic, which makes it a little more complicated."
President Trump said the U.S. will impose the tariff on Monday on all goods coming from Mexico. The tariff could increase to 25% if Mexico doesn't take steps to check the flow of immigration from Central America over its terrain to the U.S. border.
Ford now builds the Fiesta, Fusion, and Lincoln MKZ in Mexico, as well as diesel engines for its Super Duty trucks. Ford has announced plans to build commercial vans and a battery-electric SUV next year.
Ford is one of several manufacturers that build trucks, vans, and cars in Mexico. General Motors builds its Chevrolet Silverado and GMC Sierra at a plant in Silao, Guanajuato. FCA builds the Ram ProMaster van and Ram Heavy Duty at a plant in Saltillo, Coahuila.