Cnn
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The Trump administration’s prices on imported cars and car parts will cost General Motors between $ 4 and $ 5 billion this year, while the country’s largest automaker has reduced its profits.
CEO Mary Barra shared estimates in a letter to shareholders. Released early Thursday. The letter and advice on profits for the year were delayed from their release scheduled for Tuesday, when the company declared a drop in profits from the first quarter and expected tariff changes compared to the Trump administration.
GM is the first big company to estimate, in dollars, how much the radical prices of President Donald Trump will cost him. Many others have taken over the forecasts for profits due to the economic uncertainty that followed.
Trump’s prices have annoyed not only global companies, but also investors, nations and everyday Americans. The main stock market indices have closed a volatile April and, on Wedneday data, new data showed that the US gross domestic product has decreased unexpectedly in the first three months of the year as fears of recession abound.
The automotive industry was a particularly central target for Trump’s pricing efforts, the samples already in place on most automobiles and prices imported to come this Saturday on many imported parts used to build cars in American factories.
Although GM is not the dominant world car player that it was in the past, it is still the largest American automaker, with American sales of 2.7 million cars and trucks last year.
It was also very profitable, displaying a record net income of nearly $ 12 billion in 2024, excluding special items. Barra’s letter indicates that 1 million American workers depend on GM, as an employee, suppliers or resellers, with 50 American manufacturing factories and parts of parts in 19 states.
But Barra’s letter indicates that the company now provides the profits adjusted before interest and taxes between $ 10 and 12.5 billion this year, significantly lower than $ 14.9 billion which he won on this basis last year, and Less than the advice he gave in January before Trump announces his samples.
GM faces prices on several fronts. He built cars and trucks in Mexico and Canada, producing nearly a million vehicles in these two countries last year, according to S&P Global Mobility. Most of these vehicles end up being exported to American dealers.
In addition, GM imported more than 400,000 South Korea vehicles last year. All imported cars now face a 25%rate, although Canadian and Mexican prices can be reduced by credits for American and Canadian manufacturing parts.
In addition, the 1.7 million GM cars and trucks built in the United States last year depended on parts imported to some extent. According to an estimate of the Kogod School of Business of the American University, GM vehicles built by US have American parts representing an average of 54% of their content.
From this Saturday, GM could face 25% of prices on many of these imported components. While the Trump administration has announced partial compensation, GM could still face substantial costs.
Nevertheless, Barra thanked the Trump administration for the break on the prices of automotive parts and has raised hopes for new changes.
“We are impatient to maintain our strong dialogue with the administration on trade and other policies as they continue to evolve,” she said. “As you know, there are discussions in progress with key business partners who can also have an impact.”
