GM shows Trump tariffs cut US$1b from quarterly profit, shares fall
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The news: General Motors’ second-quarter net income fell 35% to USD1.9 billion ($2.91 billion) from USD2.9 billion a year earlier after President Donald Trump’s tariffs took a USD1.1 billion bite out of its bottom line.
The numbers: The largest US automaker by sales reported adjusted earnings per share of USD2.53, down from USD3.06 a year earlier but above analyst expectations. Revenue declined 1.8% to about USD47 billion.
Analysts described the unchanged full-year profit forecast as a disappointment to some investors and noted that stronger international results masked weakness in GM’s core North American operations.
Shares were trading about 7.52% lower in the morning.
GM maintained its full-year adjusted core profit forecast of between USD10 billion and USD12.5 billion but said it expects the tariff impact to be greater in the third quarter.
Additional costs included USD300 million from a recall of nearly 600,000 trucks, USD600 million from a buildup of EV inventory and USD200 million from weaker pricing on fleet sales.
US sales rose 7% and the company achieved a second straight quarterly profit in China, improving by USD175 million over a year ago.
The context: President Trump’s tariffs on imported vehicles and auto parts have added USD4–5 billion in expected costs to GM this year.
The company has not raised sticker prices significantly and is instead repatriating some production to able to offset at least 30% of that impact.
What they said: CEO Mary Barra said GM is adapting to new trade and tax policies.
“We are positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape,” Barra said as she noted a June announcement to shift some production to the US from Mexico.
“Despite slower EV industry growth, we believe the long-term future is profitable electric vehicle production, and this continues to be our North Star,” she told analysts in a call.
The sources: General Motors, Bloomberg, Reuters
