GM Net Income Crashes as Trump Tariffs Take Hold

General Motors reported a 35% decline in net income for the second quarter of the year, much of that due to the new Trump tariffs which took a $1 billion bite, the automaker reported. More from Headlight.News.

General Motors is the latest automaker to report suffering a sharp drop in net income due to the impact of Pres. Donald Trump’s tariffs on imported autos, auto parts and key metals including aluminum and steel.

The earnings report, released Tuesday morning, came a day after rival Stellantis said it expected to lose about $2.7 billion for the first half of 2025, with Trump tariffs a key factor. Both automakers expect to see the trade sanctions cost them even more going forward.

“Tariffs are obviously a big story for us,” GM Chief Financial Officer  Paul Jacobson said during a Tusday morning interview on CNBC. “We’re in a bit of an adjustment phase right now, but I think the team is really firing on all cylinders.”

A sharp downturn

All told, GM said second-quarter net income came in at $1.9 billion, tariffs costing it $1.1 billion. Global revenue, meanwhile, fell 1.8% to $47.1 billion for the April-June period. Adjusted earnings before interest taxes, or EBIT, declined 32% to $3.04 billion.

The impact of the new tariffs was even more apparent in the automaker’s North American results – pretax profits plunging 46% to $2.4 billion. Revenues came in at $39.5 billion. Notably, the region’s adjusted margins fell to 6.1% from 10.9% a year ago.

The news wasn’t entirely bleak, however, with sales rising in China for the second consecutive quarter after tumbling sharply in 2024 – which led CEO Mary Barra to order a major restructuring of that region’s operations. Equity income for the second quarter rose to $71 million, a marked turnaround from the year-earlier loss of $104 million.

Barra cautiously optimistic

“I believe everything we’re doing strategically and proactively, along with closer alignment of emissions rules with consumer demand, will further differentiate us from our competitors, increase our resilience, and help us emerge from this transition period even stronger and more profitable than before,” CEO Mary Barra said in a letter detailing the results for shareholders.

While reasonably upbeat, GM still expects the new Trump tariffs to have anywhere from a $4 billion to $5 billion impact on its earnings for the full year.

The automaker produces a number of its most popular models, from the little Chevrolet Trax to the full-size GMC Sierra, outside the U.S. It has laid out plans to shift vehicle production back to the States, where possible, while also increasing the use of domestically sourced parts and components for American plants.

More Auto News

• Stellantis Plunges Deep into the Red; Blames Tariffs for Big Hit
• White House Says Automakers Will Pay no Fines for Missing Mileage Rules
• Check Out This Week’s Headlight.News Podcast

Shifting federal policies creating havoc in auto industry

GM isn’t the only automaker struggling to deal with the cost of the new import tariffs.

Stellantis expects to go about 2.3 billion euros, or $2.68 billion, into the red for the first half of this year, the company announced Monday, a sharp year-over-year reversal. It generated a 5.6 billion euro profit during the first half of 2024. Tariffs contributed to the red ink, and the company estimated the hit will increase to as much as 1.5 billion euros, or $1.76 billion, for the full year.

Both GM and Stellantis could benefit, however, from the Trump administration’s decision not to seek fines for their missing federal fuel economy standards between 2022 and 2025. That could add up to hundreds of millions of dollars in savings for the biggest of the two companies, industry analysts said.

As of midday, Wall Street traders drove GM shares down by around 6.8%, to $49.50.