General Motors (GM) has estimated it will face $4 billion to $5 billion in tariff costs this year, which will eat into its earnings and slash profit guidance for the year. The company’s CEO, Mary Barra, told CNN that pricing is unlikely to change despite the higher costs, but acknowledged that market conditions can lead to price adjustments.
The tariff costs were revealed in a letter to shareholders, which was delayed from its planned release on Tuesday due to concerns about potential changes to the Trump administration’s tariffs. GM had previously lowered its profit guidance for the year and halted plans to spend billions on repurchasing its stock.
The impact of the tariffs will not be limited to investors; the 45,000 members of the United Auto Workers union also receive annual profit-sharing payments from GM. The company’s decision to halt share buybacks has raised concerns among both shareholders and employees.
GM is not alone in facing economic uncertainty due to Trump’s sweeping tariffs. Many global companies have walked back earnings forecasts, and the auto industry as a whole has been targeted by the levies. The US gross domestic product unexpectedly shrank in the first three months of the year, fueling recession fears.
The company’s record profits in 2024 will be affected by the tariff costs, with adjusted earnings before interest and taxes expected to fall between $10 billion and $12.5 billion this year. GM faces tariffs on imported cars and parts, which could impact its manufacturing and supply chain operations.
While some analysts expect car prices to rise due to the tariffs, others believe softer demand may keep prices in check. Car buyers rushed to purchase vehicles in March and early April, pulling forward sales that might have taken place later in the year.
Source: https://edition.cnn.com/2025/05/01/business/gm-ceo-barra-tariffs-cost