Donald Trump is shaking the foundations of the modern world economy as he slaps never before seen trade tariffs across the world. Friend and foes alike are in the cross hairs but it appears certain aspects of the calculations have been a finger in the air job with unexpected consequences.
The tariff will also affect Formula One and its operations and Haas Automation which owns the F1 team of the same name is already feeling the impact of the trump tariffs in an unexpected fashion.
Haas Automation is a machine tooling business which employs thousands of Americans across the USA providing classic manufacturing jobs Trump claims he wants to help increase. The steep tariffs on imports is having a “significant” impact on the American based business, but the direct effect on F1 will be much wider than a team owner in financial trouble.
Haas Automation a classic US manufacturing business
Haas promote its business through motorsports teams both in F1 and NASCAR which has a huge fan following in the rust belt in particular. Despite the rapid rise of F1’s popularity in the USA, NASCAR remains the number one motorsport with US TV viewers.
The unprecedented tariffs trump has imposed on America’s trading partners has caused stock markets to crash and fears of a global trade war are on the increase as a number of countries hit the hardest have retaliated with their own tariffs on US imports. Almost $6 trillion has been wiped of the value of America’s top 50 companies already and today the markets are spiralling again following the extra 50% levied on China, taking their total to between 104-114%.
Haas Automation has issued a statement which says: “In recent days, we’ve seen a dramatic decrease in demand for our machine tools from both domestic and foreign customers. Out of caution, we have reduced production and eliminated overtime at our sole manufacturing plant in Oxnard, California, where we employ 1,700 workers and have been in operation since 1983. We have also halted hiring and put new employment requisitions on hold.”
The problem for Haas is whilst it is an all American manufacturing business, it needs to source its raw materials from outside the USA. Those now sourced in China have more than doubled almost overnight in price and other popular Asian countries producing raw materials and base line components while being hit will lesser tariffs the impact is not too different.
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Huge pain for US based companies
Haas is now lobbying the US administration to introduce “tariff exemptions for raw materials and components vital to the US machine tool industry and maintain tariffs for imported machine tools.” Yet this significant US company must now stand in line with the likes of presidents and prime ministers from across the world, all keen to persuade Donald Trump that their case too is the exception from the new rules.
Despite the Trump intention to raise money for the US to compensate them for various trade deficits they have around the globe, those who are paying the price are not the countries supplying the US, but the American based importers who sourced their products form other countries. They in turn must pass on these increased costs to the American consumer.
The price of Iphones leapt a reported 54% in the US this week and the pain for the other US tech giants will be seen in huge price hikes in the coming days.
Haas scaled down its NASCAR entries this season from being a four programme to just one and the effect of tariffs on its international F1 team is as yet unknown. However, the likelihood is costs will rise massively for Haas F1 given the team does not manufacture any of its own components but buys them in predominantly from Italy and Delara and Ferrari.
Haas F1 cars fabricated in Europe
Italy and the EU have been hit with 20% tariffs today, although a reciprocal European response with tariffs on US goods will almost certainly see Trump retaliate raising tariffs on the EU even further, as he did with China today.
Haas’ main F1 facility is headquartered in Annapolis, North Carolina and is adjacent to its NASCAR facility. The team has an established based in Banbury, England which is utilises to turn the F1 cars around between races during the European part of the calendar. There is also a design office in Maranello incorporated into the Scuderia Ferrari HQ.
The entire composition of the Haas F1 cars will be subject to the tariffs and this together with the huge rise in costs for the tooling business may pout the entire Haas empire in mortal danger. Haas F1 entered the sport in 2016 and its costs were merely those associated with staffing and creating an assembly line for the components produced by Delara and Ferrari.
In addition there are the engineers and mechanics who support the F1 campaign around the world. Many are US based, but others are in Italy and England. The Haas F1 team says in a statement today that
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Haas F1 deny imminent difficulties
The difficulties being faced by Haas Automation “does not have any impact regarding MoneyGram Haas F1 Team. It’s business as usual regarding the team and there is no change to our development plan, recruiting process and other projects,” it added.
But this may be the reality for now as the F1 team is now self funded through F1 prize money and its sponsorship programme led by MoneyGram. However, when a business tycoon runs into trouble across his portfolio of trading activities, the inevitable response is to sell off assets which can raise substantial revenue, even if only for the principal’s personal financial security.
Gene Haas has done well out of his Formula One team, which cost buttons to setup and whose costs have been largely covered by those corporations desperate to be involved in the growing F1 popularity. Any investment via Haas Automation will already have been written of as tax deductions and so the chief creditor of the team is Gene himself.
Haas F1 was recently forced to settle out of court with former team principal gentler Steiner who claimed he had been done out of his share of the organisations increase in value. The sums were undisclosed, but given there popular Italians claim ran into the hundreds of millions of dollars, the settlement will have been substantial.
Haas F1 worth over $1bn
The lates valuations placed on the Formula One teams was published in December and reported by Blackbookmotorsport.com. Every single team is now valued at over $1bn and team values hit an average valuation in 2024 of an eye watering $2.31bn.
Whilst Ferrari, Mercedes and Red Bull lead the way, each with values in excess of $3.5bn, Haas F1 is ranked amongst the F1 minnows with Williams listed at $1.24bn, RB is $1.22bn, Sauber at $1.2bn and bringing up the rear is Haas at a ‘meagre’ $1.02bn.
At present nobody really knows which way the mind of Trump will go. With markets crashing again for the fifth day in a row it appears there is a united global opposition to the US administration’s war on global trade, and its not going too well for its home grown businesses and American consumers either.
This may be enough to persuade Trump to change his mind, but for now businesses like Haas Automotive are at the peril of hurricane force financial winds. With many believing F1 values have peaked for now and may even be slightly over priced, it would be most tempting for Gene Haas, to rake in the cash for his meagre endeavours in F1 since 2016. Another option wold be to deregister the Haas F1 team as a US company and shift all operations to Banbury, costing jobs in the US and the expense of a relocating an F1 teams production line.
F1 tariffs applied
In the wider world of F1 tariffs will be a problem. The sport and the teams produce equipment to go racing, which once complete is sent overseas and there it remains for the following year’s races. Unlike the cars and equipment which comes in and out for a race, the kit that remains permanently in the US will be subject to import duty.
Further problems will arise in Formula One form the Trump tariffs as some of this equipment whilst based in the USA travels to other races in the America’s like Canada, Mexico and Brazil. There is no clear line from the US administration on how products criss crossing Us borders repeatedly will be treated.
The car manufacturers who are in the same boat with parts for road cars crossing US borders with Canada and Mexico several times before final assembly, have expressed concern the tariffs will be imposed each time a border crossing is made.
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Should Gene Haas wish to sell his F1 team, the optimum moment to do so may have now passed. This time last year Andretti racing was advised to “go buy a team” rather than pursue their application to become the eleventh on the grid. Mario Andretti’s response was there “are no F1 teams for sale.”
As Formula One battles to solve its latest crisis over the “Frankenstein” power units coming online next season, the issue of Trumps tariffs has not been fully appraised as yet, but they will have a significant impact on the sport in the near future. Us sponsors coughing up extra import duties may well decide sponsoring an F1 team is a luxury they can no longer afford.
Corporate America is forecasting doom and gloom across the board after Trump’s tariff easing frenzy and Formula One will share the pain with their US based partners and sponsors alike.
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Hamilton is eight in the F1 drivers championship, with just 15 points from three Grand Prix and a Sprint race, whilst joint favourites to win this season are 46 (Verstappen) and 47 (Norris) points ahead. Lewis is also clinging on to his team mates coat tails as Charles Leclerc has banked 20 points and lies sixth in the table.
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With over 30 years of experience in Formula 1 as an insider journalist, I have built trusted connections across the paddock, from race engineers and mechanics to senior team figures. At The Judge 13, I and a handful of trusted colleagues share exclusive Formula 1 news, expert analysis and behind-the-scenes stories you will not find in mainstream motorsport media.
What a lazy piece of journalism, full of grammar and spelling mistakes.
The word “journalism” is doing some pretty heavy lifting here
Perhaps you’re best off reading all the mainstream content generated by AI with its perfect spelling?
Indeed, this would have been a very interesting story about how shifting international economic policies directly affect the infrastructure at the highest level of Motorsport; however, as well noted by other readers, the shambolic misspellings and grammar problems practically ruined anything I would have gotten out of it.