GM CEO on Trump's Trade Threats: 'We Can Adjust to Anything'—Automaker Braces for 25% Tariffs on Popular Cars Made in Mexico And Canada

Not long after taking the oath of office, President Donald Trump wasted no time rolling out his agenda. Following his speech after the inaugural parade, he signed more than 200 executive actions, including some onstage at Capital One Arena in Washington, D.C. in front of cheering supporters.

Among the early policy moves was a focus on the auto industry, specifically targeting what he called then-President Joe Biden's “electric vehicle mandate.” He also reiterated his plan to impose 25% tariffs on goods from Mexico and Canada, tying the move to border issues like illegal immigration and drug trafficking.

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"We're thinking in terms of 25% on Mexico and Canada because they're allowing […] vast numbers of people to come in and fentanyl to come in [across the U.S. border]," Trump told reporters in the Oval Office on Jan. 20. "I think we'll do it on February 1st."  

General Motors GM last month reported a $2.96 billion loss for Q4 2024, primarily due to a $4 billion write-down related to its joint venture in China with SAIC. Excluding one-time charges, earnings per share came in at $1.92. For the full year, GM's net income dropped 41% to $6 billion, despite a 9.1% revenue increase to $187.4 billion.  

CEO Mary Barra described GM's overall performance as strong, highlighting its mix of gas and electric vehicles. "A year ago, I said we were optimistic about 2024 given the choice we would offer customers, including industry-leading full-size pickups, new and redesigned SUVs, and an expanding portfolio of EVs," she said.  

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GM is among the automakers most exposed to Trump's proposed tariffs, as many of its top-selling models, including pickup trucks, are built in Mexico and Canada. During the earnings call, Barra said the company is prepared to adapt, emphasizing efforts to mitigate short-term disruptions.  

"With respect to possible tariffs, we are working across our supply chain, logistics network, and assembly plants so that we are prepared to mitigate near-term impacts," she said. "Many of these actions are no cost or low cost." She added that GM has been studying various scenarios and has the capacity to shift production if necessary.  

Barra expressed optimism that diplomatic efforts could help avoid the tariffs, pointing to ongoing talks between the Trump administration and Mexican President Claudia Sheinbaum.  

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GM sold 189,000 EVs in 2024, slightly below its 200,000-unit target, but aims for 300,000 in 2025 with new models, including from Cadillac. Barra assured investors that GM remains flexible with its EV strategy and won't invest heavily without clear demand. 

Recent moves, like delaying the Orion Assembly plant's restart and selling its stake in the Ultium battery plant to LG Energy Solutions, reflect a more cautious approach. "I think we have the strongest portfolio GM has had in decades," Barra said. "Maybe I’m a little biased, but I think we're seeing that with the response in the market."

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