GM expects up to $5 billion tariff hit, even after recent relief

General Motors expects a tariff impact of $4 billion to $5 billion this year — almost one-third of its expected profits for 2025 — even after President Trump pulled back on some auto levies this week, the company said Thursday.Why it matters: The warning underscores how much pain American companies may face as Trump uses trade leverage to try to bring back domestic manufacturing.Driving the news: GM said it will be able to absorb about 30% of the tariff impact by cutting costs and shifting production plants or supply chains.It does not plan to pass on the costs to consumers through higher vehicle prices.Between the lines: GM has already shifted some pickup truck production from Mexico to a plant in Fort Wayne, Indiana, adding 50,000 units to a factory that was already operating on three shifts. CEO Mary Barra said GM has additional plans to increase U.S. capacity, but wasn't ready to announce them.GM is also working to localize its supply chains by helping suppliers ensure the content of their parts is compliant with the U.S.-Mexico-Canada free trade agreement.It's also assembling more battery modules in the U.S., rather than in Mexico or Canada, which is a relatively inexpensive way to boost GM's U.S. content, Barra said. By the numbers: GM trimmed its earnings guidance for 2025 after getting some clarity this week from the White House on where automotive tariffs will settle. It now expects adjusted earnings before interest and taxes of $10 billion to $12.5 billion, down from a previous estimate of $13.7 billion to $15.7 billion. Notably, GM said it will continue investing in the growth of its business, making no change to its planned $10 billion to $11 billion capex for the year. What they're saying: Barra struck a confident and cooperative tone during an investor call Thursday as she described GM's ongoing discussions with the Trump administration."We understood from early discussions that he had a very strong goal to strengthen the U.S. auto industry," she said. "So we haven't thought of this as a chaotic environment."GM is aligned with Trump's goals and is adapting to changing policies, she said.What to watch: GM, which imports hundreds of thousands of vehicles from South Korea, Mexico and Canada, is keeping a close eye on Trump's trade talks with those nations, which could potentially lower the size of its tariff hit. "We look forward to maintaining our strong dialogue with the Administration on trade and other policies as they continue to evolve," she said in a shareholder letter.Editor's note: This story has been updated with new details from GM.

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