Auto: Tariff Trouble — GM Profits Plunge $1.1B in Q2 as Trade War Heats Up

General Motors just posted a $3 billion Q2 profit, but under the hood, things aren’t looking so smooth. According to GM’s latest earnings report, net income dropped 35% compared to the same quarter last year—driven largely by $1.1 billion in tariff-related costs stemming from the Trump administration’s revived trade policies.

💸 Key Numbers & Fallout

• Q2 Net Income: $1.89 billion (down from $2.93B in Q2 2024)
• Stock Drop: GM shares fell 6.5% after Tuesday’s market open
• Tariff Cost Projection: $4–5 billion for 2025
• Third Quarter Impact: Expected to be worse, due to “indirect tariff costs”

Despite efforts to soften the blow through manufacturing adjustments and pricing strategies, GM admitted that mitigation efforts have only slightly offset the Q2 hit.

🏭 Shifting Gears: Domestic Production Ramps Up

To combat future tariff exposure, GM announced a $4 billion investment into U.S. assembly plants in Michigan, Kansas, and Tennessee. This production shift is expected to bring home around 2 million vehicles previously made in Mexico—where 25% tariffs are now in effect.

⚡️ EV Division Still Charging Ahead

GM CEO Mary Barra remained bullish on the company’s electric vehicle momentum, even as federal EV tax credits are scaled back.

“Chevrolet is now the #2 EV brand in the U.S.,” Barra said, “while Cadillac leads in luxury EVs as the #5 overall.”

🔧 Industry-Wide Impact

The pain isn’t limited to GM. On Monday, Stellantis—parent company of Jeep, Chrysler, Fiat, and Maserati—posted a staggering $2.7 billion loss, also citing tariffs as a major driver. The company cut North American imports by 109,000 units (a 25% year-over-year drop) and said it would reissue financial guidance on July 29.

🎙️ MainEvent.News | Backstage Take

The trade war has officially hit Detroit. While GM’s $3B profit sounds healthy, the deeper story is how tariffs are rewriting the math on globalization. Automakers that once thrived on cross-border supply chains are now re-nationalizing production, and that shift comes with cost, confusion, and corporate growing pains. Expect more earnings volatility — and more political fireworks — as Q3 approaches.