To the extent GM succeeds in keeping tariffs from pushing car prices higher, it will mitigate any potential drag auto tariffs might have on demand for US-based steel production for cold-rolled coil, galvanized steel sheet, cold-heading quality wire rod and special bar quality steel, according to industry sources.
In its updated guidance on Thursday, Barra told shareholders that she expects a $10-12.50 billion range in operating earnings for 2025,
In January, by comparison, GM offered guidance of $13.7-15.7 billion for this year’s operating earnings.
Paul Jacobson, GM’s chief financial officer, told investors in the earnings call that GM should be able to mitigate the tariff exposure by at least 30%.
Barra told shareholders that GM had “gained almost 2 points of the US market share year on year” in the first quarter. “We also solidified our position as the number two EV [electric vehicle] seller in the US, with Chevrolet becoming the fastest growing EV brand.”
Further, the CEO said, GM achieved 8.8% operating margins in North America in the first quarter, “well within our 8-10% target range.”
GM and the Trump administration
GM has been communicating with the Trump Administration prior to the inauguration, have continued those discussions during the past month as the administration has spoken with automakers about potential relief for tariffs on auto parts.
Trump’s 25% tariffs on imported cars went into effect April 3 with an exemption on auto parts until May 3 to allow talks with automakers about potential relief.
GM announced its earnings on Monday April 28 and delayed its conference call and its updated guidance until after the Trump administration unveiled its auto parts tariff relief on Tuesday April 29.
The new order reduces 25% duties on imported parts up to 15% of the value of vehicles assembled in the US for one year starting on May 3, 2025.
Next year the offset falls to 10% and ends on May 1, 2027.
Import adjustment offset
Automakers will be able to apply for an import adjustment offset amount equal to 3.75% of the aggregate manufacturers suggested retail price (MSRP) value of all vehicles assembled in the US from April 3, 2025, through April 30, 2026.
Relief will be lowered to 2.5% of the aggregate MSRP from May 1, 2026, to April 30, 2027.
Barra said on Thursday that the company has been consolidating its supply chain in the US over the past five years, increasing the number of parts going into its vehicles made in the US by 27%.
Since the auto tariffs have been announced, GM has already begun to expand domestic production at truck assembly plant in Fort Wayne, Indiana.
Excluding Canada and Mexico, GM’s domestic US content is 54%, with 46% of content being imported from outside the US, according to the American University Kogod School of Business Made in America Index for 2024.
The 2015 GM cars had significantly higher 65% domestic content, according to the index.
“We’re going to keep focusing on the customer, giving them choice, and we think there’s a lot we can do to impact those tariffs, continuing to increase our US content and continuing to build even more cars in this country that we do today,” Barra said in an interview with media outlets.
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