President Trump’s tariffs on imported vehicles and car parts have cost General Motors $1.1 billion this past quarter, according to the Detroit-based legacy automaker.
GM, the largest car company in the US by sales, said the tariffs partially fueled a 35% drop in net income in the three-month period that ended in late June.
In May, GM slashed its outlook, warning that tariffs could result in losses totaling between $4 billion and $5 billion for 2025.
GM, whose portfolio includes legacy brands such as Chevrolet, Buick and Cadillac, reported net income of $1.9 billion for the quarter, down from $2.9 billion in the second quarter of 2024.
The company had already lowered its earlier profit guidance for 2025. It now says greater impacts from the tariffs are expected to hit in the third quarter, though GM is maintaining its profit guidance for the full year.
Shares fell on the news. GM stock dropped nearly 7% Tuesday, falling to $49.59 by midday.
Investors seemed to be hoping the automaker would raise its profit guidance for the remainder of the year, Garrett Nelson, an analyst at CFRA, wrote in a note.
Better-than-expected results in GM’s international business, including China, as well as currency fluctuations masked weakness in the company’s core North America unit, Bernstein analyst Daniel Roeska wrote in a Tuesday note.
GM has largely held prices steady despite the tariffs, choosing to absorb the additional costs while shifting some auto production to the United States and holding out for trade deals with Mexico, Canada and South Korea that would provide relief.
GM CEO Mary Barra hasn’t ruled out raising car prices, however, and has said the company will stay competitive.
“We’ve got a longer term plan to be able to mitigate a substantial part of this,” GM CFO Paul Jacobson told investors and analysts Tuesday.
“We’re obviously looking for things to normalize around these trade deals that will get done, and we expect that will happen.”
Tariffs hit GM’s operating income by $1.1 billion in the second quarter. The company said few of its tariff “mitigation” efforts, such as making more vehicles at its US factories, were fully implemented.
Automakers reporting second quarter financial results are offering the first official look at how tariffs are ripping through the industry.
Stellantis, the Netherlands-based parent of US brands Ram and Jeep, said Monday that tariffs shaved off $350 million from its bottom line. Tesla is expected to report results Wednesday.
GM earlier this year said tariffs would add costs of $4 billion to $5 billion — about a third of its pretax profit last year — and that it aims to offset 30% of the tariff bill through actions like adjusting its manufacturing footprint.
For instance, the company plans to shift a small share of production to the US, such as bringing the gas-powered Chevrolet Blazer SUV from a factory in Mexico to one in Spring Hill, Tenn.
By 2027, GM hopes to increase its US auto production by 300,000 units, or roughly 17%.
GM’s electric vehicle sales, while still a small slice of its overall business, more than doubled during the second quarter when compared with last year.
Even so, GM recently announced it would put nearly $900 million into revamping an EV motor plant in New York to make V-8 engines, and Barra said in her letter to shareholders that the gas-powered business “now has a longer runway.”
Despite the hit from tariffs, GM posted an industry-leading sales gain of 12% at dealerships through the first half of the year, according to Cox Automotive.
Sales for the industry as a whole were up 7% during the same period, Cox data show. But GM’s wholesale volumes to automotive dealers, from which the company books its revenues, were down 7% in the quarter, while overall revenue declined about 2%.
Trump in April imposed 25% tariffs on imported vehicles and on automotive parts, though he later softened the blow by exempting most parts from Canada and Mexico and allowing automakers to pay tariffs only on the non-US content in their vehicles assembled in Canada and in Mexico.
GM imports roughly half the vehicles it sells in the US, including entry-level Chevrolets and Buicks manufactured in South Korea that have sticker prices under $30,000, as well as full-size trucks and electric vehicles made in Mexico and Canada.
The small SUVs it produces in Korea, such as the Chevy Trax, still cover their costs of production even with tariffs, GM said.
The Post has sought comment from the White House.
