General Motors (GM) is set to lose billions this year thanks to President Donald Trump’s tariffs. The Trump administration’s tariffs on imported cars and auto parts will cost General Motors between $4 billion and $5 billion this year, as the nation’s largest automaker slashed its earnings projections.
CEO Mary Barra shared the estimates in a letter to shareholders, released early Thursday. The letter, and earnings guidance for the year, were delayed from their planned release on Tuesday, when the company reported lower first-quarter earnings and awaited tariff changes from the Trump administration.
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The 25% tariffs on imported vehicles and auto parts — especially from Mexico, Canada, and the EU — have significantly disrupted the U.S. auto industry. Most American automakers, including Ford and Stellantis alongside GM, rely heavily on global supply chains. These tariffs have raised production costs and vehicle prices (by an estimated $2,000–$3,000 per car), lowered demand, and caused automakers to revise financial forecasts or delay investments. Companies are exploring shifting production to the U.S., but this requires time and capital. Uncertainty around trade policy is also affecting business planning and could lead to job cuts or reduced output.
Barra’s letter says that 1 million American workers depend on GM, either as employees, suppliers or dealers, with 50 U.S. manufacturing plants and parts facilities in 19 states.
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Over the past five years, General Motors (GM) has faced challenges such as the COVID-19 pandemic and global supply chain disruptions. Vehicle sales declined from 6.8 million in 2020 to 5.9 million in 2022 but gradually recovered, reaching 6.0 million units in 2024. Despite fluctuating sales, GM maintained strong profitability. Net income rose from $6.4 billion in 2020 to a record $14.9 billion in 2024, driven by high vehicle prices, cost-cutting, and improved operations. The company’s resilience and strategic responses allowed it to recover from downturns and strengthen its financial performance amid a volatile global auto market.