It’s no secret that American automakers like General Motors and Ford have significant international operations. Those business activities have become potential liabilities as the rapidly evolving tariff situation progresses, leading GM to announce expected losses in the billions of dollars.
CEO Mary Barra told investors the automaker expects “tariff exposure of $4 to $5 billion,” a significant portion of which, $2 billion, comes from South Korean imports. Mexico also accounts for around $2 billion, and another bill comes from “indirect material imports.”
While some of GM’s prices climbed considerably heading into the 2025 model year, the automaker isn’t planning another price hike to account for tariffs. CFO Paul Jacobson said President Trump’s order to temporarily reduce some tariffs would help. “One of Tuesday’s presidential actions will provide a tariff offset based on the more than 1.5 million vehicles we build in the US each year. This will help mitigate a substantial portion of the tariffs on parts going into those vehicles, and help avoid added costs on US vehicle production.”
GM builds several vehicles in Mexico, including the Honda Prologue EV. It also imports the Buick Envision from China and builds trucks in Canada, so it’s not surprising to see the automaker adjust its financial guidance. That said, Ford and Stellantis are in the same boat, so it will be interesting to see how their projections change.
[Images: General Motors]
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