Tariffs will wipe out up to a quarter of GMs’ net profit for the year.
GM Faces Up to $5 Billion Tariff Bill in 2025, Slashes Outlook
The Wall Street Journal reports GM Faces Up to $5 Billion Tariff Bill in 2025, Slashes Outlook
The country’s largest automaker said it faces $4 billion to $5 billion in tariff-related costs this year, which it aims to partially offset by pulling back on spending and increasing production at its U.S. factories.
GM said Thursday that it now expected its full-year net profit to be between $8.2 billion and $10.1 billion, down from a prior projection of $11.2 billion to $12.5 billion. The company reported its first quarter earnings on Tuesday, but postponed its full-year guidance until after President Trump announced his revised tariff structure.
“Adapting to this dynamic environment will take some time,” GM’s Chief Financial Officer Paul Jacobson told analysts on call Thursday.
Chief Executive Mary Barra said the company planned to reduce its tariff bill by building more pickups at its Fort Wayne, Ind., factory and making more electric-vehicle battery modules in the U.S. The company said it was also looking to trim costs where it could. “We are scrutinizing our discretionary spending everywhere,” Barra said on the call.
GM imports its most affordable vehicles, such as the Chevrolet Trax and Buick Envista, from South Korea. Imports from that country and other costs accounted for $2 billion of the company’s estimated tariff bill, Jacobson said.
Earlier this week, GM said net income slid 6.6% to $2.8 billion in the first quarter of 2025, a decrease driven in part by higher costs and a preplanned production halt that dented sales of some trucks and SUVs.
GM said sales rose 17% during the first three months of the year, but believed that much of that increase was due to people and businesses purchasing vehicles ahead of Trump’s tariffs. The company expects sales to slow down for the remainder of 2025.
GM will bring some production back to the US. Prices will go up and GM will sell less cars.
Not Exactly Thrilled
On March 26, I noted News Flash: Trump Says “Car Companies Will Be Thrilled With Tariffs”
The word of the hour is “thrilled” by 25 percent tariffs on autos starting April 2.
The Ford CEO, GM CEO, and Cox Automotive chief economist Jonathan Smoke say they are not thrilled by the tariffs.
But Trump says they are thrilled.
First-Quarter 2025 GDP, the Good, the Bad, and the Ugly
Earlier today, I noted First-Quarter 2025 GDP, the Good, the Bad, and the Ugly
Here’s a more detailed look at GDP for the first quarter.
Trump Accuses Amazon of “Hostile Political Act” on Tariff Price Labels
Yesterday, I noted Trump Accuses Amazon of “Hostile Political Act” on Tariff Price Labels
Amazon considered, then rescinded, price tags that show tariff impact.
Hostile Political Act
Amusingly, it is now considered political act to tell the truth. Go figure.
And it gets straight to the heart of the matter as to who pays tariffs.
Rather than answer the question, the administration blames Amazon.
Every company should do what Amazon proposed to show what big liars the administration is.
Every company should do what Amazon threatened to do. Unfortunately, Amazon backed down.