GM cuts 2025 outlook, projects up to $5bn hit from tariffs

NEW YORK: General Motors pledged Thursday to take additional steps to boost its US supply chain after projecting a $4-5 billion hit to the US auto giant’s 2025 earnings from President Donald Trump’s tariffs.

GM expects to offset “at least” 30 per cent of that tariff hit from “self help” measures that include relatively quick changes to its production and supply chain footprint, executives said.

Chief Executive Mary Barra described her talks with Trump and his administration as “very productive”, praising a White House move on Tuesday to temper tariffs on auto parts as advancing “our shared goals of growing the US auto industry which will be good for America in the long term”.

On Thursday, GM updated its adjusted earnings range to $10 billion to $12.5 billion from the earlier $13.7 billion-$15.7 billion.

The impact includes $2 billion in estimated tariffs on finished vehicles from South Korea, where GM manufactures a number of value-priced autos, including the Chevrolet Trax, a small sport utility vehicle.

GM postponed its earnings conference call until Thursday after Trump’s tariffs move.The US president also released a proclamation that gives the industry a two-year grace period to reduce “American reliance on imports of foreign automobiles and their parts” -- designed to encourage firms to move supply chains stateside.

Under that policy, companies that import parts for vehicles assembled in the US would be able to offset 3.75 per cent of a vehicle’s list price in the first year and 2.5 per cent in the second year.But Trump has not taken steps to mitigate a 25 per cent tariff on auto imports, which also affects GM vehicles made in Canada and Mexico.