General Motors is feeling the pinch of tariffs, with its profit margin taking a hit due to the cost imposed by US trade policies. In its quarterly earnings call, CFO Paul Jacobson revealed that tariffs have cost the company approximately $1.1 billion over three months, reducing its profit margin from 9% to 6.1%.
The company aims to offset at least 30% of the full-year 2025 tariff impact through changes in manufacturing, targeted cost initiatives, and price adjustments. However, US tariff policy remains unpredictable, with ongoing bilateral deals potentially avoiding some costs entirely.
Despite a 25% tariff on certain vehicles, General Motors continues to import vehicles made in Korea, including affordable models that are in high demand. The company’s stock price dropped 6% following the earnings report, indicating Wall Street’s dissatisfaction with its strategy of absorbing tariffs as a hit to profits.
Industry data suggests that car manufacturers have largely absorbed higher tariffs rather than passing them on to customers, who are already facing increased new car prices averaging nearly $49,000. The latest data from Kelley Blue Book shows an average price increase of 1.2% year over year, below the 10-year average annual rise.
Source: https://www.npr.org/2025/07/22/nx-s1-5476293/car-makers-tariff-pain-general-motors-profits