General Motors (GM) has cut its 2025 profit forecast, warning it could take a hit of up to $5 billion due to auto tariffs levied under President Donald Trump’s latest trade policy. The revised guidance comes just two days after the company suspended its earnings outlook.
In a letter to shareholders released Thursday, CEO Mary Barra said GM now expects earnings before interest and taxes to range between $10 billion and $12.5 billion — a sharp drop from its original forecast of up to $15.7 billion issued in January.
Despite recent executive orders from Trump intended to ease the burden on automakers — including removing overlapping levies on aluminum and steel and offering temporary offsets for U.S.-built cars — GM said the remaining 25% tariff on imported vehicles and parts still poses a serious challenge. The automaker sources several top-selling models, including pickup trucks and SUVs like the Chevy Equinox and Trax, from plants in Canada, Mexico, and South Korea.
Barra said the company is continuing “strong dialogue” with the administration in the hope that ongoing trade discussions can reduce its tariff exposure. In the meantime, GM is adjusting operations to mitigate losses, including ramping up pickup truck production at its Indiana facility to avoid tariffed imports.
While GM beat Wall Street expectations with first-quarter earnings of $2.78 per share, profits declined due to lower truck output and unfavorable foreign exchange rates. To preserve cash, the company is postponing $4 billion in planned share buybacks and has slashed capital spending by $900 million over the last quarter, bringing the total to $1.8 billion.
On April 29, GM’s stock closed at $46.94. As of May 1, the stock is trading at $46.21, reflecting a decline of approximately 1.7%.
