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| GM says Trump tariffs knocked $1.1bn off its operating income last quarter | |
| (32 minutes later) | |
| US automaker’s second-quarter core profit fell 32% and it expects tariff impact to worsen in the third quarter | |
| General Motors announced Tuesday that Donald Trump’s tariffs knocked $1.1bn off its operating income in its last quarter. | General Motors announced Tuesday that Donald Trump’s tariffs knocked $1.1bn off its operating income in its last quarter. |
| The US automaker’s second-quarter core profit fell 32% to $3bn and said it expects the tariff impact to worsen in the third quarter. The company stuck to a previous estimate that trade headwinds threaten to hit the bottom line by $4bn to $5bn. GM said it could take steps to mitigate at least 30% of that impact. | The US automaker’s second-quarter core profit fell 32% to $3bn and said it expects the tariff impact to worsen in the third quarter. The company stuck to a previous estimate that trade headwinds threaten to hit the bottom line by $4bn to $5bn. GM said it could take steps to mitigate at least 30% of that impact. |
| The automaker’s revenue in the quarter ending on 30 June fell nearly 2% to about $47bn from a year ago. Shares fell about 3% in premarket trade. | The automaker’s revenue in the quarter ending on 30 June fell nearly 2% to about $47bn from a year ago. Shares fell about 3% in premarket trade. |
| Nearly 1 million workers in the US are employed in the automotive manufacturing industry, with GM the largest US auto manufacturer by market share. GM employs around 162,000 people globally. | Nearly 1 million workers in the US are employed in the automotive manufacturing industry, with GM the largest US auto manufacturer by market share. GM employs around 162,000 people globally. |
| In a letter to shareholders, Mary Barra, the chief executive, said GM is “positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape”. | In a letter to shareholders, Mary Barra, the chief executive, said GM is “positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape”. |
| GM was among corporations that revised annual guidance due to the impact from Trump’s tariffs, lowering it to an annual adjusted core profit of between $10bn and $12.5bn. The company on Tuesday stood by that forecast. | GM was among corporations that revised annual guidance due to the impact from Trump’s tariffs, lowering it to an annual adjusted core profit of between $10bn and $12.5bn. The company on Tuesday stood by that forecast. |
| Trump imposed 25% tariffs on foreign-made vehicles and car parts in early April. | Trump imposed 25% tariffs on foreign-made vehicles and car parts in early April. |
| According to the Yale Budget Lab, Americans now face an average tariff rate of 18.7%, the highest since 1933. | According to the Yale Budget Lab, Americans now face an average tariff rate of 18.7%, the highest since 1933. |
| In June 2025, GM announced plans to invest $4bn over the next two years into three US auto plants in Michigan, Kansas, and Tennessee, after announcing a $888m investment in a Tonawanda, New York plant to support GM’s next generation V-8 engine. | In June 2025, GM announced plans to invest $4bn over the next two years into three US auto plants in Michigan, Kansas, and Tennessee, after announcing a $888m investment in a Tonawanda, New York plant to support GM’s next generation V-8 engine. |
| In the shareholder letter, Barra said the investments will “greatly reduce our tariff exposure” with the new manufacturing capacity to begin coming online in 18 months. | In the shareholder letter, Barra said the investments will “greatly reduce our tariff exposure” with the new manufacturing capacity to begin coming online in 18 months. |
| The Brookings Institute published a report in May 2025 on the impact of tariffs on US auto manufacturing, noting “the overall impact of higher tariffs on auto manufacturing in the US is unclear, with potential to be net negative”. | The Brookings Institute published a report in May 2025 on the impact of tariffs on US auto manufacturing, noting “the overall impact of higher tariffs on auto manufacturing in the US is unclear, with potential to be net negative”. |
| Beyond tariffs, GM’s underlying business in the quarter was solid. Sales in the US market – its main profit center – rose 7%, while the company continued to command strong pricing on its pickup trucks and SUVs. GM swung back to a small profit in China, after losing money there a year earlier. | Beyond tariffs, GM’s underlying business in the quarter was solid. Sales in the US market – its main profit center – rose 7%, while the company continued to command strong pricing on its pickup trucks and SUVs. GM swung back to a small profit in China, after losing money there a year earlier. |
| Jeep-maker Stellantis on Monday warned that tariffs would significantly affect results in the second half of 2025, and said tariffs cost it about $350m. | Jeep-maker Stellantis on Monday warned that tariffs would significantly affect results in the second half of 2025, and said tariffs cost it about $350m. |
| The falls come as US inflation rose in June 2025 to 2.7% from 2.4% in May, as companies have raised prices in response to tariff rates implemented by the Trump administration. | The falls come as US inflation rose in June 2025 to 2.7% from 2.4% in May, as companies have raised prices in response to tariff rates implemented by the Trump administration. |
| Reuters contributed to this story | Reuters contributed to this story |