General Motors CEO Mary Barra told Wall Street analysts Tuesday that the company expects Trump administration tariffs to cost it $3 billion to $4 billion in 2026. However, this estimate may be revised due to recent developments in trade agreements with South Korea. Last fall, President Trump cut the tariff on South Korean imports from 25% down to 15%.
On Monday night, Trump announced that he would restore tariffs on South Korean vehicles and other imports to 25%, citing the lack of approval for a preliminary trade agreement from last autumn. This move may impact GM's profits, particularly for its low-end South Korean models such as the Chevrolet Trax and Trailblazer, Buick Encore GX, and Envista. 5 billion bite out of its profits for 2026, but downgraded this estimate after the import relief was announced.
GM has been absorbing most of these tariff costs, with the majority coming from reducing incentives rather than raising prices. 4% of average transaction price. 3%, to $23,495 for 2026.
75% before the market closed Tuesday afternoon. The company is also investing in moving production to the US, which will help absorb tariff costs. GM expects to assemble over 2 million vehicles in the US this year, making it a top domestic producer.
The company's earnings call contained some product updates and tidbits, including its plans for electric vehicles and new battery technology.
The impact of tariffs on GM's profits is a significant concern, particularly for its low-end South Korean models. However, the company's efforts to move production to the US may help mitigate these costs. As the auto industry continues to navigate trade agreements and their effects on profitability, it will be interesting to see how GM adapts to these changes.
