Tariffs on imported cars and auto parts cost General Motors $1.1 billion in the second quarter, the nation’s largest automaker said Tuesday.
That hit to its bottom line was largely responsible for a 21% drop in net income for the period. The company said it expects tariffs to cost it between $4 billion to $5 billion by year’s end.
The auto industry has been greatly disrupted by President Donald Trump’s tariffs – more than most businesses – as the taxes on imported cars and auto parts went into effect long before most other tariffs.
The industry so far has been able to weather those costs and remain profitable without raising car prices, in large part because it already has a backlog of vehicles built or imported before tariffs took hold. The supply of pre-tariffs vehicles differs by model and manufacturer.
GM said it is still on track to bring in an adjusted operating income of between $10 billion to $12.5 billion for the full year, down from the $14.9 billion it earned on that basis in 2024. Both those earnings and its tariff-cost estimates for the full-year are unchanged from its guidance issued three months ago, when the tariff details were first announced.
And GM also said it has no immediate plans to hike car prices specifically to cover the greater costs associated with the tariffs. It forecasts industrywide prices will rise only between 0.5% and 1% for the year.
Vehicles imported to the United States since April 3 now carry a 25% tariff. GM built nearly 1 million vehicles in Canada and Mexico in 2024, according to figures from S&P Global Mobility, or about 36% of its total North American production. Not all of those Mexican and Canadian cars were sold in US dealerships though. GM also imported about 100,000 cars from South Korea that were sold in the United States.
Every car that’s built in an American factory has at least some imported parts, and often more than 50% of their parts are imported. While some of the parts imported from Canada are tariff free, many other parts have carried their own 25% tariffs since May 3.
On Monday, GM rival Stellantis announced that tariffs had cost it €300 million, or about $350 million, in the first half of the year. Stellantis sells cars in the United States, both domestically built and imported, under the Jeep, Ram and Dodge and Chrysler brands, and it also imports vehicles for Italian brands Fiat and Alfa Romeo. Its preliminary financial results show a net loss for the first half of the year, though that was due to reorganization efforts that went beyond the tariffs.
But tariffs had led to production pauses and cut back imports of some Stellantis models, which helped to cause a 10% drop in its US sales in the second quarter.
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