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After $1.1B Q2 Hit, GM Leaders See Tariff Bite Getting a Bit Worse This Quarter

July 22, 2025

Mary Barra and her team still expect the company will be able to offset about 30% of the $4 billion to $5 billion in expected full-year costs from the trade measures.

Geert De Lombaerde

The various tariffs imposed by the Trump administration this year weighed on General Motors Corp.’s second-quarter adjusted earnings to the tune of $1.1 billion, and CFO Paul Jacobson told analysts July 22 that that figure will rise this quarter.

GM produced about $3.0 billion in adjusted earnings before interest and taxes in the three months that ended June 30, which was down from $4.4 billion in the same period of 2024. Jacobson and Chair and CEO Mary Barra are still expecting that tariffs will cost the automotive giant between $4 billion and $5 billion this year and still expect that the company will be able to offset about 30% of that by tweaking its manufacturing footprint, cutting some costs and by holding the line on pricing.

On a conference call to discuss GM’s Q2 results—which showed net income of $1.9 billion on revenues of $47.1 billion, numbers that were down 35% and 2%, respectively, from the same time last year—Jacobson said tariffs’ impact on the company this spring was slightly less than expected because of the timing of some of the Trump team’s trade measures. That’s why Q3’s costs will climb as GM continues to import vehicles from Canada, Mexico and South Korea.

“Over time, we remain confident that our total tariff expense will come down as bilateral trade deals emerge and our sourcing and production adjustments are implemented,” Jacobson added.

Those adjustments include bringing more production to U.S. plants via a $4 billion capital spending push—not all of which is in addition to previously announced investment plans—that will bring online new capacity by the end of next year. Asked if her team is preparing for a worst-case tariff scenario that could end up being better, Barra said “that’s a fair comment.”

“I don’t want to predict what we’re facing but I think, with what we know today, […] there’s potential,” Barra said.

During the second quarter, GM sold nearly 1.54 million vehicles, up from 1.43 million in the same period of 2024. In North America, sales were 878,000 versus 827,000, an increase that lifted the company’s market share by half a point to 16.4%.

Shares of GM (Ticker: GM) were down more than 6% to $49.63 in midday trading July 22. Over the past six months, they have given up about that much ground, which has shrunk the company’s market capitalization to about $51 billion.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas Journal, T&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.

With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.