The Ford GM tariff battle, playing out largely behind closed doors in Washington, is a case study in what happens when two companies use trade policy as a competitive weapon rather than a shield. Both are claiming the mantle of America’s most patriotic automaker. Both are simultaneously lobbying for tariffs that would hurt the other while seeking carve-outs that benefit themselves. The consumer, as ever, is the residual claimant on whatever damage results.
Each company’s case, and what it reveals
Ford’s argument rests on its domestic manufacturing footprint. The company assembles some 80% of the vehicles it sells in the US on American soil and employs more factory workers there than any competitor. On that basis, its executives have pressed for higher tariffs on imported vehicles, with South Korea as the primary target. That is where The Wall Street Journal reports GM builds roughly 400,000 vehicles a year destined for the US market, including some of its most affordable models.
The wrinkle is that Ford simultaneously wants lower duties on imported parts, particularly aluminium, which currently faces 50% tariffs. Ford is the industry’s largest buyer of aluminium, and its reliance on imports has deepened after factory fires took out its biggest domestic supplier. The administration has so far declined to oblige on that point. So: tariffs on the other fellow’s finished cars, relief on one’s own imported raw materials. The internal logic is not hard to follow.
GM’s counter-argument is that Ford’s electric-vehicle battery strategy leans on Chinese technology. Ford’s battery venture in Michigan operates with Chinese firm CATL as partner, and CNBC notes that cars imported from South Korea currently carry no tariffs at all, compared with a 2.5% duty on Japanese imports, a fact that somewhat undercuts Ford’s framing of South Korea as a tariff-exploiting haven. GM, meanwhile, is temporarily importing Chinese batteries for the Chevy Bolt EV to manage costs while it develops its own sodium-based battery programme. Kurt Kelty, GM’s vice president of batteries and sustainability, put it plainly in June: ‘We are not licensing somebody else’s technology from China. We’re building on GM battery know-how in America.’
GM also argues it is the larger overall contributor to the US workforce once salaried employees are counted alongside hourly workers, and that its South Korean-built small SUVs serve buyers who could not otherwise afford a new vehicle. Last year, GM attempted to block federal funding for a Ford battery factory in Michigan and has continued to press for a bill from Senators Bernie Moreno and Elissa Slotkin that bans internet-connected Chinese vehicles to be extended to cover batteries, a change that would directly threaten the Ford-CATL partnership. In its current form, the bill excludes batteries.
The Ford GM tariff battle’s real cost falls elsewhere
The profit arithmetic for GM illustrates why the stakes are not trivial. According to AutoWeek, GM initially estimated the tariff regime would cost it $4 billion to $5.5 billion in profit for the year, a figure it has since revised down to $3.5 billion to $4 billion. The revision reflects some relief measures, including a reported reduction in South Korean import tariffs from 25% to 15%, but the residual hit is still substantial. Ford faces its own pressure from the 50% aluminium duties it cannot get waived.
Neither company actually wants what the administration appears to want on the US-Mexico-Canada Agreement. Both Ford and GM, along with Stellantis, have pressed behind the scenes for USMCA renewal and for lower tariff rates on North American parts and vehicles than on goods from elsewhere. Trump, by contrast, has signalled a preference for more manufacturing to shift back to the US, at costs (in labour, steel and aluminium) that neither company’s current model can easily absorb. A USMCA breakdown would impose pain on both sides of the Ford-GM Ford GM tariff battle simultaneously.
The aluminium situation sharpens the broader point. Steel and aluminium workers want their own tariff protection, but face higher car prices as a result of tariffs on finished vehicles. Car buyers want affordable vehicles, which means lower tariffs on the imported models that provide price competition. Every constituency in this chain is trying to pass the cost to the next one down. The consumer sits at the bottom of that chain, with no one to pass it to. The Ford GM tariff battle is a vivid illustration of the mechanism, but the mechanism was always the point.
