GM’s Q2 profits slump 35% amid tariffs

By Juanita Rothman
2 Min Read
Profits Slump
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General Motors reported a significant 35% drop in second-quarter profits, largely due to the impact of tariffs imposed by the Trump administration, which cost the company $1.1 billion.

Why it matters: The substantial decline in GM’s profits highlights the far-reaching consequences of the U.S. tariffs on the automotive industry, affecting major operations in Mexico, Canada, and South Korea.

The details:

  • GM’s profits fell to $1.9 billion year-on-year, with revenues dipping 1.8% to $47.1 billion.
  • The U.S. imposed 25% tariffs on imported finished cars in early April, impacting GM’s operations in Mexico, Canada, and South Korea.
  • Car companies have also faced tariffs on imported steel, aluminum, and auto parts.
  • GM expects annual operating income of $10 billion to $12.5 billion, having achieved $6.5 billion in the first half of the year.

Despite the challenges, GM confirmed its full-year forecast, although it cautioned that profits in the second half of 2025 would be lower than in the first.

What they’re saying:

  • “The first quarter was the peak of the tariff impact,” said Chief Financial Officer Paul Jacobson, expressing optimism about a partial recovery in profit margins later in the year through manufacturing adjustments, targeted cost initiatives, and consistent pricing.
  • Jacobson indicated that it would take 18 to 24 months to implement the necessary capital projects for these adjustments.

The response: In June, GM announced a $4 billion investment over two years to expand production in Michigan, Kansas, and Tennessee, aiming to utilize unused capacity within the U.S. as tariffs increase the cost of importing finished vehicles.

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The impact: GM’s stock fell 6.6% following the earnings report. This news came a day after another major carmaker, Stellantis, announced it expected a $2.7 billion loss in the first six months of the year due to the tariffs.

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ByJuanita Rothman
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Juanita is a management consultant and expert in innovation management. She is focused majorly on technology and teams.

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