“Preferential Access for UK Vehicles”: Ford Stock (NYSE:F) Slips as Ford Panel Pans Trump Deal

Looking over the fallout from the recent trade deal that President Trump established between the United States and the United Kingdom has left the domestic car market in an odd position. In fact, reports note, a new panel backed by legacy automaker Ford (F) has considered the deal and found it a problem for the domestic car market. This hit home for Ford investors, who sent shares slipping fractionally in Tuesday afternoon’s trading.

The deal in question, the American Automotive Policy Council noted, makes for an odd situation: it is now actually cheaper to import a UK vehicle that has “very little U.S. Content” than it is a United States – Mexico – Canada (USMCA) vehicle that has around half of its parts from the United States. This leaves the Council concerned that overseas rivals might end up with a critical pricing advantage, particularly if President Trump makes similar deals with the rest of Europe or with Asia.

Ford’s CEO, Jim Farley, had particularly strong words for the pattern of dealmaking, noting that it would “blow a hole” in the industry, and would ultimately allow “…give “free rein to South Korean, Japanese and European companies that are bringing 1.5 million to 2 million vehicles into the U.S….” Of course, this assumes that a 25% tariff remains on Canadian and Mexican imports, which would be unlikely with the Trump Administration so clearly willing to deal.

A Sock in the Goodwill

A second report posed a potentially big problem for Ford: a shot in the goodwill. In fact, one story detailed how a driver took a car for the weekend to serve as a test drive. Some dealerships do this; I actually test drove a Ford Escape that way several years ago. But the driver in question found herself stuck with a $1,300 repair bill, and the start of a viral outrage sensation online.

The driver managed to get pre-approved for a car loan, and was thus lent the car for a long weekend, Saturday to Tuesday. But when the air conditioner in the car stopped working on the ride home, that was a bit of a problem. The dealership told her to bring it back, which she did, and found out she was on the hook for the $1,300 bill the repair incurred despite not actually owning the car. She also discovered the dealership refused her trade-in as well, and the dealership had processed the loan outright, basically selling her the car. Naturally, she objected to most of this, and took her ire to social media, where a bit of a firestorm hit Ford.

Is Ford Stock a Good Buy Right Now?

Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 12 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 11.3% loss in its share price over the past year, the average F price target of $9.71 per share implies 5.77% downside risk.

See more F analyst ratings

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