General Motors said Tuesday its Q2 profit dropped 35% to $1.8 billion, as a result of $1.1 billion in additional costs tied to tariffs enacted under former President Donald Trump. The GM Q2 profit figure came in below last year’s $2.8 billion, though revenue held up at $47.1 billion, beating analyst expectations.
The company cited new 25% import duties on vehicles and parts as the primary factor behind the GM Q2 profit decline. CEO Mary Barra said GM is “positioning the business for a profitable, long-term future” and actively adapting to evolving trade policy.
Despite the tariff blow, GM reported earnings per share of $2.53, beating analyst forecasts of $2.44. Shares of GM dropped nearly 7% in early trading Tuesday, as investors reacted to the margin pressure.
To counter rising costs, GM said it will move production of the Chevrolet Blazer SUV from Mexico to Tennessee, part of a broader effort to localize supply chains and mitigate future tariff exposure. The company expects to offset up to 30% of tariff-related costs through operational adjustments.
The $1.1 billion tariff expense was disclosed in GM’s latest quarterly report, and adds to mounting pressure across the U.S. auto industry. According to Bloomberg, the new trade policy could cost domestic carmakers more than $40 billion in 2025 alone. Rival automaker Ford has warned of up to $1.5 billion in additional expenses, while Stellantis projects €2.3 billion in losses for the first half of the year, per AP News.
In a CNBC interview, GM CFO Paul Jacobson said the company does not plan immediate price hikes for consumers, though he acknowledged some “incremental” adjustments may occur depending on how trade dynamics evolve. “We’re not passing these costs straight to customers — not yet,” he said.
EV sales provided a bright spot. Cadillac was the top-selling luxury EV brand in the U.S. last quarter, and GM’s global EV sales more than doubled compared to a year ago. Still, GM continues to invest in combustion engine capacity, including a $900 million upgrade at a New York plant to support V8 engine production.
The automaker reaffirmed its 2025 full-year earnings forecast, keeping its adjusted earnings-per-share target between $8.25 and $10. Analysts say that despite the drop in GM Q2 profit, the company is showing strong fundamentals through supply chain realignment and product diversification.
Though the full impact of tariffs may grow in the coming quarters, GM’s strategy — balancing EV growth with ICE resilience while reshoring production — could help stabilize its bottom line in the long term.
