Key Takeaways
- Reuters reported Monday that the US and Canada are working on a deal to ease US tariffs on Canadian steel and autos. Steel faces tariffs of up to 50% and autos face 25%.
- A deal would cut a recurring cost for Ford and General Motors. It would also likely head off a rise to 50% on Canadian steel and autos that’s set for Jan. 1, 2027.
- Ford’s net tariff cost was about $2 billion in 2025, and GM expects $2.5 billion to $3.5 billion of gross tariff costs in 2026.
- Ford reports its third quarter after the close today, and the number to watch is whether it holds its $10 billion to $11 billion adjusted EBIT guidance.
Ford Motor (F) reports its third quarter after the bell today, and some of the best news it could get this week came out of Ottawa and Washington.
The US and Canada are working on a deal to ease US tariffs on Canadian steel and autos, Reuters reported on Monday. Ford and General Motors (GM) have been paying this tariff bill out of their margins since early 2025, so this is real money for both.
What exactly happened
- The talks reportedly focus on Section 232 tariffs: up to 50% on Canadian steel and 25% on Canadian autos.
- Trump has already announced a rise to 50% on Canadian steel and auto imports from Jan. 1, 2027.
- One Canadian source said a deal was possible before the Nov. 3 midterms.
Canadian Prime Minister Mark Carney said Monday there’s been “a slight intensification” in talks, and that “to the extent any progress has been made, it’s because the US is coming closer to our position.”
President Trump told Detroit’s Fox 2 on Sunday, “we’re getting close to a deal, and a deal could happen that’s going to be very good for everybody.”
Nothing’s signed, though. US sources said the administration wants more concessions from Canada.
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Why this matters
Ford’s annual report puts its 2025 tariff cost at about $3 billion gross and $2 billion net. On $187.3 billion of revenue, that’s about a point of margin, in a year when Ford’s gross margin fell 2.6 points.
(Tariffs weren’t the only hit. Ford’s aluminum supply problems at Novelis cost it about $2 billion of EBIT in 2025 as well.)
And Ford’s Canadian exposure is growing. Its Oakville, Ontario plant starts building Super Duty pickups this quarter, adding up to 100,000 units of capacity.
GM’s bill is bigger. It expects $2.5 billion to $3.5 billion of gross tariff costs in 2026, and said on its third-quarter call that it’s tracking toward the low end. Even the low end is about a sixth of the $14.5 billion to $15.5 billion of EBIT-adjusted it guided to last week. Only part of that bill comes from Canada, but GM’s operating margin slipped in 2025, the year tariffs hit.
What’s next
Analysts expect Ford to report adjusted EPS of $0.41 on adjusted EBIT of $2.38 billion tonight, according to Bloomberg consensus. The bigger number is Ford’s full-year guidance of $10 billion to $11 billion of adjusted EBIT. A supplier problem halted production at Dearborn Truck for nearly a week in late September, and Ford called the hit “containable within the full-year 2026 adjusted EBIT guidance.”
That guidance includes a $1.3 billion one-time tariff refund booked in the first quarter, which won’t repeat in 2027. A cut to the tariffs on Canadian steel and autos would keep paying off year after year.
Analysts expect Ford’s normalized EPS to get back to 2024’s $1.84 this year, then reach $1.92 in 2027.
That’s only about 4% growth. Since nothing is signed yet, a deal that heads off January’s increase would make $1.92 easier to defend.
Talks could still collapse, as they did in August. Jennifer Thomas, American Honda’s senior vice president of corporate affairs, said Tuesday that the Jan. 1 increase “really would be catastrophic just for the entire industry.”
A deal is worth more than it looks
My take: a deal won’t fix Ford’s EV losses or the pricing pressure at Ford Pro. But it would take a recurring cost out of both automakers’ margins and take the worst case for 2027 off the table. That relief would last a lot longer than a one-time refund.
Of course, nothing’s signed yet. The week before the midterms will show whether this is a real deal or campaign-season talk.
So what is Ford stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
