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Tariffs Spark Reduced GM Earnings Forecast, Boost Consumer Pain
General Motors Company’s (GM) earnings forecast has been reduced due to the recent tariffs imposed by President Trump. The automaker expects a significant financial hit, totaling $4-5 billion, which includes $2 billion from vehicles imported from South Korea and other countries.
The newly implemented tariffs will increase the cost of production for GM, leading to higher prices at the pump for consumers. To mitigate this impact, GM has already taken steps to reduce costs by increasing direct purchases in the U.S., reducing material spend in China, becoming a major battery cell manufacturer in the U.S., and implementing other self-help actions.
Despite these efforts, GM’s CEO Mary Barra believes that the company will not be able to absorb the entire cost of the tariffs. This is expected to lead to higher prices for vehicles, which could negatively impact consumer demand.
In an attempt to reduce the financial burden, the automaker has been working with suppliers to increase their U.S. content and compliance under the USMCA agreement. The company also plans to increase full-size pickup production by 50,000 units at its Fort Wayne, Indiana plant.
GM is not alone in its struggles; Ford Motor Company’s CEO Jim Farley has also expressed concerns about the negative impact of tariffs on their business.
Source: https://www.forbes.com/sites/edgarsten/2025/05/01/tariffs-spark-reduced-gm-earnings-forecast-boost-consumer-pain/
