Ford, GM Shares Drop Due to Metal Tariffs
Feb. 20, 2018—Shares of OEMs Ford and General Motors declined late last week, after the U.S. Commerce Department recommended stiff tariffs for imported steel and aluminum that could increase the cost of building vehicles, as noted in a report by The Detroit News.
Commerce secretary Wilbur Ross recommended a 24 percent global tariff (a tax to be paid) on steel imports, along with a 7.7 percent tariff on imported aluminum. President Donald Trump is expected to make a decision on the recommendations from Ross by April.
Ford stock closed down 1.4 percent by the close of trading on Friday on the New York Stock Exchange, while GM fell 1.8 percent.
One expert told The Detroit News that an increase in steel and aluminum tariffs will be a net negative for the auto industry. The Commerce Department recently said its proposals are intended to increase domestic steel production from its present 73 percent of capacity to approximately an 80 percent operating rate, and raise production of aluminum from the present 48 percent average capacity to 80 percent.
Ford said in January that it expects to see a decline in its profits from the $1.78 per share it earned in 2017 due to higher commodity prices in 2018. GM has projected that its 2018 adjusted earnings per share will be similar to last year’s result, when it reported earnings of 22 cents per share.