General Motors (GM) has adjusted its financial projections for the year in anticipation of sizable financial impacts from potential auto tariffs that could reach up to $5 billion by 2025. Earlier this week, GM announced it was revisiting its forecast for 2025, considering the potential influence of tariffs that were not part of their initial yearly outlook.
On Thursday, GM declared that it now expects its annual adjusted earnings before interest and tax to range between $10 billion and $12.5 billion. This revision reflects the current exposure to tariffs estimated between $4 billion and $5 billion. Initially, GM had forecast its 2025 adjusted EBIT to range from $13.7 billion to $15.7 billion.
The adjustment in GM’s forecast followed President Donald Trump’s signing of executive orders on Tuesday that altered some of his previously imposed 25% tariffs on vehicles and automotive parts. This marked a significant change, as the steep import taxes had posed a potential threat to domestic manufacturing operations. Automakers and independent analyses suggest that such tariffs could increase prices, reduce sales, and make U.S. manufacturing less viable in the global market. President Trump has presented these changes as a step toward encouraging automakers to transfer more of their production to the United States.
Nonetheless, the broader impact of Trump’s tariff policies on the U.S. economy and car sales remains uncertain. Many economists agree that the tariffs—potentially affecting the majority of imports—could elevate prices and stifle economic growth, possibly impacting car sales in spite of the more recent administration initiatives to alleviate previous policy challenges.
In a message to shareholders, GM CEO Mary Barra expressed her eagerness to maintain robust communications with the Trump administration concerning trade and other evolving policy matters. She noted, “There are ongoing discussions with key trade partners that may also have an impact. We will continue to be nimble and disciplined and update you as we know more.”
Following these developments, GM’s stock experienced an over 2% increase prior to the start of trading hours.