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General Motors says that the fallout caused by Donald Trump’s chaotic global tariffs will increase its annual costs by up to five billion dollars.
On Thursday, the major U.S. car manufacturer cut profit forecasts for 2025 by 20 percent, with executives predicting the company was now expected to make between $8.2 billion and $10.1 billion in 2025.
This is down from a previous forecast of $11.2 to $12.5 billion.
“GM’s business is fundamentally strong as we adapt to the new trade policy environment,” GM’s chief executive Mary Barra said, per The New York Times.
It comes after Trump signed executive orders on Tuesday to relax some of his blanket 25 percent tariffs on automobiles and auto parts, after the import taxes threatened to hurt domestic manufacturers such as GM.
Analysis has indicated that the tariffs could raise prices, reduce sales and make U.S. production less competitive worldwide. On the call, The Times reported, GM’s chief financial officer, Paul Jacobson, said the company now expected new vehicle prices to rise 0.5 percent to 1 percent this year, instead of a previous forecast of a price drop.
Trump has portrayed the changes as a bridge toward automakers moving more production back to America. “We just wanted to help them during this little transition, short term,” he told reporters. “We didn’t want to penalize them.”
On Thursday’s call, Barra said GM was looking to cut costs and work with suppliers to increase domestic production of both parts and components, including battery modules. This would aim to mitigate around 30 percent of the tariffs’ impact, she said.
The manufacturer previously announced it would be increasing production of pickup trucks at a plant near Fort Wayne, in Indiana, to reduce imports from Canada and Mexico – two nations hit hard by Trump’s trade war.
According to The Times, Barra said output at the Fort Wayne factory would increase by about 50,000 trucks this year.
After Trump announced his tariff easing on Tuesday, Barra said GM was grateful for his support of the industry, noting the company was looking forward to conversations with the president and working with the administration.
“We believe the President’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy,” Barra said in a statement.
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