US EditionGM’s Latest Tariff Hit: $1.1 Billion
UNITED STATES, JUL 22 – General Motors absorbed a $1.1 billion tariff loss but exceeded profit expectations due to strong sales of gasoline trucks and SUVs, while lowering its annual earnings forecast.
- General Motors disclosed that tariffs imposed under President Trump reduced its profits by $1.1 billion in the second quarter, prompting the company to pause production this month at its Silao, Mexico plant that manufactures Silverados.
- The tariff effects arise from U.S. import duties on cars manufactured in countries including China, Mexico, and South Korea, along with doubled tariffs on steel and aluminum, which together are straining GM’s profitability and disrupting its supply chains.
- Despite tariff headwinds, GM saw a 7% rise in U.S. sales and maintained strong pricing on pickups and SUVs while planning a $4 billion investment to shift some production from Mexico to U.S. facilities.
- GM CEO Mary Barra expressed confidence that, even with the current slowdown in the EV market, the company remains committed to producing electric vehicles profitably over the long run, viewing this commitment as a guiding principle.
- GM confirmed its full-year earnings forecast remains in the range of $10 billion to $12.5 billion, while cautioning that tariff-related expenses are expected to rise. The company plans to implement cost reductions and adjust production, aiming to offset roughly one-third of the tariff costs through these measures.
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