GM blames Trump's tariffs for billion-dollar loss, warns larger losses on the way

General Motors (GM) has announced a $A1.68 billion loss for the second quarter (April-June) of 2025, citing uncertainty brought on by United States (US) import tariffs. 

In its quarterly earnings call, the automaker pinned the entire $US1.1 billion loss down to the automotive import tariffs introduced from April 2, 2025, which extended to components in May before being combined with broader ‘reciprocal’ tariffs.

In its presentation, GM told shareholders to, “Expect Q3 [July-September] impact to be higher than Q2 due to timing of indirect tariff costs.”

“We are positioning the business for a profitable, long-term future as we adapt to new trade and tax policies, and a rapidly evolving tech landscape,” said GM CEO Mary Barra in a letter to shareholders. 

CarExpert can save you thousands on a new car. Click here to get a great deal.

The loss is 32 per cent down on the same period in 2024, with the company’s revenue falling three per cent year-on-year.

With 746,588 vehicles sold between April and June, GM was the best-selling automaker in the US in the first half of 2025 with 1.4 million deliveries across its Buick, Cadillac, Chevrolet and GMC brands.

Ms Barra also highlighted the $US4 million ($A6.9 billion) investment in US manufacturing, bringing an additional 300,000 vehicle production capacity.

“This will help us satisfy unmet customer demand, greatly reduce our tariff exposure, and capture upside opportunities as we launch new models,” Ms Barra said. 

“The capacity begins coming online in just 18 months, after which we project building more than two million vehicles in the U.S. each year as we scale.”

This included a US$888 million (A$1.377 billion) investment in the development of a sixth-generation small-block V8 engine at the Tonawanda Propulsion plant in Buffalo, New York.

“Overall, GM is well positioned to succeed in an ICE [internal combustion engine] market that now has a longer runway,” Ms Barra said.

The news comes as rival Stellantis, which owns US brands including Jeep, Ram Trucks, Dodge, Chrysler among others, posted a €2.3 billion (A$4.1 billion) loss for the first six months of 2025 after a profit of €5.6 billion (A$10 billion) over the same period last year. 

In April, US President Donald Trump introduced ‘automotive’ tariffs of 25 per cent on imported vehicles, controversially including Mexico and Canada – crucial parts of a broader North American supply chain – despite GM, Ford and Stellantis asking for more time to adjust to the tariffs. 

Mr Trump relented somewhat, providing a one-month reprieve on tariffs for vehicles built in Canada – such as the Chevrolet Silverado – and Mexico, where Stellantis makes vehicles such as the Jeep Wagoneer S.

In May, a tariff on components was also applied, which was also layered with country-specific ‘reciprocal’ tariffs, meaning tariffs on materials – such as imported steel – would attract additional tariffs. 

Analysts predicted the average cost of a new vehicle could increase by as much as $US12,000 ($A18,250), while President Trump said the tariffs were intended to grow US manufacturing.

“Ultimately, more production at home will mean stronger competition and lower prices for consumers,” President Trump told media in a press conference announcing the tariffs on April 2, 2025. 

GM says average transaction prices have increased to $US51,000 ($A77,570) and expects to raise prices between 0.5-1.0 per cent this year. 

MORE: Peugeot, Ram parent posts A$4.1 billion loss, forecasts more tariff trouble

MORE: Reciprocal tariffs on US trading partners will have ‘ripple effects’ on Australia