Auto giant General Motors reported lower second-quarter profits Tuesday following a $1.1 billion hit from US tariffs but confirmed its full-year forecast.
The results topped analyst estimates, but GM cautioned that profits in the second half of 2025 would be lower than in the first.
The US automaker pointed to sales growth in North America where new and revamped trucks and sport utility vehicles sold briskly with solid pricing. GM was among the carmakers that benefited from a surge in demand this spring from consumers who wanted to beat US tariffs.
Profits overall fell 35.4 per cent to $1.9 billion year-on-year, while revenues dipped 1.8 per cent to $47.1 billion.
The United States imposed 25 per cent tariffs on imported finished cars in early April, a move that affected major GM manufacturing operations in Mexico, Canada and South Korea.
Auto companies have also been buffeted by tariffs on imported steel and aluminium and auto parts.
The tariff hit in the second quarter reflected that聽there were 鈥榤inimal mitigation offsets,鈥� GM said in a slide presentation.
The Detroit-based company鈥檚 outlook for a weaker second half of 2025 reflects 鈥榮easonally lower鈥� volumes, increased spending on vehicle launches and the presence of two quarters with a tariff hit, compared to just one.
GM expects annual operating income of between $10 billion and $12.5 billion after notching $6.5 billion in the first half of the year.
Chief Financial Officer Paul Jacobson described the hit to profitability in the first quarter as 鈥榯he peak of the tariff impact for us,鈥� telling CNBC in an interview that mitigation efforts should enable a partial recovery in profit margins later in the year.
GM expects to mitigate 鈥榓t least鈥� 30 per cent of the tariff hit through 鈥榤anufacturing adjustments, targeted cost initiatives and consistent pricing,鈥� according to a slide.
Jacobson said it would take 18 to 24 months to implement capital projects to adjust GM鈥檚 manufacturing foot print.
In June, GM announced $4 billion over two years to expand production of plants in Michigan, Kansas and Tennessee, making use of unused capacity in its home market as President Donald Trump鈥檚 tariffs penalize imports of finished vehicles.
The June announcement included steps to produce in the United States Chevrolet Equinox and Chevrolet Blazer, two vehicles which are currently assembled in Mexico.
GM has so far not shifted production from South Korea, home to production for the Chevrolet Trax, a popular compact SUV that is priced affordably.
Jacobson told CNBC the Trax has stayed profitable even with the tariff hit from the levy on imported autos.
鈥榃e haven鈥檛 made any long-term decisions about Korea yet, mainly because there is a lot of uncertainty about that,鈥� Jacobson said.
President Donald Trump has set an August 1 deadline to reach broad trade deals with numerous countries, including South Korea, which faces a broad-based 25 per cent tariff if there is no deal.
鈥榃e鈥檙e optimistic that the US and Korea can find common ground,鈥� Jacobson said. 鈥榃e know the auto industry is important to both sides in those conversations.鈥�
Shares of GM fell 2.7 per cent in pre-market trading.
