General Motors CEO Mary Barra said on Tuesday that GM believes it can offset as much as 50% of any tariffs President Donald Trump has threatened to impose on imports from Canada and Mexico.
Barra says the Detroit carmaker has created contingency plans in anticipation of possible tariffs on auto parts, etc., entering the U.S. from the neighboring countries. These will buffer the short-term effects of added costs by 30 to 50% with ‘no capital deployment.’
Barra said at the Wolfe Research investment conference, “We are ready. Once we have clarity on what will happen or even a hint of it, we know the actions we can take.”
Present with her was GM CFO Paul Jacobson, who said that if the tariffs remain, the company would examine shifting production or changing the sourcing of parts and vehicles.
This insight is the most in-depth explanation GM has offered regarding how it would mitigate the impact of tariffs. It was mainly based on the investors’ concerns over the topic that remained unaddressed during the quarterly earnings call of the automaker two weeks back.
This led to an 8% drop in the stocks of the company. GM operates in Canada and has big manufacturing plants in Mexico, where many of its cheaper electric vehicles and its profitable full-size pickup trucks are assembled.
Barra’s comments followed remarks by Ford Motor CEO Jim Farley, who termed Trump’s tariffs-whether threatened or enacted- as having resulted in ‘chaos’ in the U.S. auto sector.
Farley stated at the Wolfe conference, “President Trump has spoken frequently about strengthening the American auto industry, increasing domestic production, and fostering innovation in this country. If the administration can pull that off, that will be a big achievement. But what we are seeing today is rising costs and a whole lot of chaos.”
Tech Journalist
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