GM Adjusts Profit Forecast Amidst Trump Tariffs
General Motors (GM) announced on Tuesday it is revising its profit outlook for the year due to uncertainty stemming from President Trump’s trade policies. The Trump administration recently imposed a 25% tariff on imported cars and plans to enforce a similar duty on imported parts. This decision is significant for GM, as half of the vehicles it sells in the U.S. are produced overseas, mainly in Canada and Mexico.
Paul Jacobson, GM’s Chief Financial Officer, stated during a conference call that the company will refrain from offering further guidance on tariffs until clearer information emerges from the administration. He warned that the tariffs could materially impact GM’s earnings in 2023.
In its first-quarter earnings report, GM revealed a profit of $2.8 billion, a 7% decline from the previous year. The company’s North American operations saw a 14% decrease in earnings before interest and taxes, despite minor profits from its international segments. Previously, GM projected a net income between $11.2 billion and $12.5 billion for 2025, roughly double last year’s figures. Jacobson emphasized that earlier forecasts could no longer be trusted.
Adding to the financial strain, tariffs on imported steel and aluminum have raised material costs. While GM experienced a minimal impact from these tariffs in the first quarter—since they began on April 3—the company remains focused on ensuring strong business fundamentals. Jacobson shared that GM had "productive discussions" with the Trump administration about tariffs, though he declined to discuss specifics, insisting he does not want to negotiate publicly.
In a strategic move, GM plans to increase pickup truck production in Indiana to reduce imports from Canada and Mexico.
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