GM feels great about the 5 billion dollar hit it expects to take from tariffs
The Case of GM: Trump’s Auto-Target Blowout and the Status of the U.S. Auto Industry — An Empirical Analysis
He is an editor with more than 10 years of experience who covers aviation, EV and public transportation. The New York Daily News and City & State have published his work.
If you want to get a better idea of how bizarre this is, look at GM. The nation’s largest automaker was expecting a pretty robust year of profits until Trump blew everything up with his tariffs. According to The New York Times, GM explained that the predictions of profits at this point would be as a guess. The company also postponed its conference call with financial analysts to discuss its first-quarter results by a couple days, while it assesses the impact of the latest curveball from the White House.
The uncertainty is preventing the industry from functioning. Stellantis, the parent company of Jeep, Dodge, and Ram, also recently scrapped its outlook for the year, with Chief Financial Officer Doug Ostermann telling analysts, “Most of us are in a period of waiting for a bit more clarity,” according to Reuters.
On Tuesday, Trump signed a new executive order walking back some of the auto tariffs he claimed just weeks before would lead to a manufacturing renaissance in the US. Now car companies that pay a 25 percent tariff on auto imports won’t have to pay other levies, like on steel and aluminum, or on certain imports from Canada and Mexico. The rules don’t seem to protect autos from tariffs on steel and aluminum that their suppliers pay and then pass on to them.
Car companies don’t like this stuff. These are multinational companies that weigh investments in factories and new models based on forecasts of future sales, as they like to plan years ahead. Market certainty is the most important foundation of this.
Many factories could take 5–1 years to build a US-made car today and the rules of the US tariffs are not sustainable in our view.
The situation is quickly heading for a crisis with all major auto stock prices falling each day. Customers are panicking, dealers are scrambling, and new models are being put on hold. It’s like being trapped in purgatory, and there’s no immediate sign that anyone is getting out.
GM Motors is Growing and Selling: The Case for a Strong, Disciplined Trade Policy on Electric Vehicles at the Trump White House
She wrote that they will continue to have strong dialogue with the Administration on trade and other policies. “As you know, there are ongoing discussions with key trade partners that may also have an impact. We will continue to be nimble and disciplined and update you as we know more.”
But Barra’s letter makes no mention of price hikes, panic shopping, or cratering demand. She is optimistic about Trump being willing to bend on tariffs. She can only do that right now.
Its revenue is up 2% year over year, and more progress is being made on its electric vehicle lineup. GM has solidified its position as the number two seller of electric vehicles in the US, thanks to the efforts of Barra, according to his statement. It is possible that GM can continue to make progress in this department, as evidenced by the recent drop in revenue and sales for Elon Musk and the company. She claimed the Chevy brand is now the fastest growing EV brand. And GM is the largest producer of lithium-ion batteries in the US.
Barra’s letter was evidence of the delicate line the automaker needs to tread in order to placate the president while also assuring investors that it can weather the financial storm ahead. And in that respect, GM says it has a lot of evidence in its favor.
