General Motors (GM) said on Tuesday that President Trump’s tariffs cost the company $1.1 billion in the second quarter, contributing to an overall decline of 35 percent in profit.
But the company still outperformed Wall Street’s estimates and stood by its full-year financial outlook, which it had adjusted down in May.
GM Chair and CEO Mary Barra said in a letter to shareholders that the company is taking steps to mitigate the impact of the tariffs
“In addition to our strong underlying operating performance, we are positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape,” Barra wrote.
She pointed to the $4 billion investment in U.S. assembly plants announced in June, which she said is expected to start building more than 2 million vehicles in the U.S. each year, starting in 18 months
“This will help us satisfy unmet customer demand, greatly reduce our tariff exposure, and capture upside opportunities as we launch new models,” she wrote.
The company anticipates the total impact of the tariffs in 2025 will be approximately $4-5 billion, but it reported “making solid progress to mitigate at least 30% of this impact through manufacturing adjustments, targeted cost initiatives, and consistent pricing.”
GM also expects tariff to be more costly in the third quarter, largely “due to timing of indirect tariff costs.”
Overall, the second half of the year is expected to be less profitable than the first for a variety of reasons, including that only one quarter, Q2, was subject to tariffs during the first half of the year, but both Q3 and Q4 are expected to see tariff policies in place.
