General Motors Alters Profit Outlook Amid Trade Policy Uncertainty
General Motors (G.M.) has revised its profit forecast for the year due to growing uncertainty stemming from President Trump’s trade policies, which include recent tariffs on imported vehicles and auto parts. In a conference call on Tuesday, G.M.’s Chief Financial Officer, Paul Jacobson, announced that the company would refrain from offering any new guidance related to tariffs until there is greater clarity on the situation. The Trump administration recently imposed a 25 percent tariff on imported cars and plans to introduce a similar duty on auto parts, a decision that threatens to impact G.M.’s operations significantly since nearly half of its U.S. sales come from cars manufactured abroad, particularly in Canada and Mexico.
Despite reporting a $2.8 billion profit for the first quarter—down 7 percent from the previous year—G.M. is cautious about its future earnings potential. The company experienced a 14 percent decline in earnings before interest and taxes in its North American sector, where most of its profits are generated. G.M. had previously projected a net income of between $11.2 billion and $12.5 billion for 2025, essentially doubling last year’s earnings; however, Jacobson stated that this prior guidance can no longer be relied upon.
The recent tariffs added cost pressures, exacerbated by previous increases on steel and aluminum imports. Though Jacobson noted that the tariffs did not significantly affect the first quarter’s performance since they took effect only in early April, he emphasized G.M.’s strong operational fundamentals. The company is also making strategic moves, including boosting pickup truck production at its Fort Wayne, Indiana plant, to minimize imports from Canada and Mexico. Jacobson concluded that G.M. looks forward to further discussions with the administration regarding tariffs.
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