GM makes a drastic decision regarding China that could shake up the automotive market

The largest automobile manufacturer in the US, General Motors (GM), has taken another step to protect its bottom line from the higher tariffs imposed by the Trump administration.

Earlier this month, Mary Barra, CEO of GM, shared with CNN that while tariffs will raise production costs, the US auto industry may struggle to increase prices due to a decline in demand for new vehicles. Given this slowing demand, industry leaders do not foresee significant price hikes, despite the White House’s tariffs making imported cars and essential manufacturing components more costly. Barra noted, “pricing is likely to remain relatively stable,” highlighting a slowdown in demand that could worsen if potential buyers face even higher prices.

This week, Reuters reported that GM will stop importing cars to China due to retaliatory tariffs that have made their vehicles uncompetitive in that market. The decision to halt shipments underscores the ongoing challenges automakers face, even as the US and China have agreed to temporarily lower tariffs and continue negotiations to prevent them from returning to the historically high levels seen earlier this month.

In 2024, GM reported selling 1.8 million vehicles in the Chinese market, compared to 2.7 million in the US.

How high are tariffs on automakers?

To encourage domestic automobile and parts manufacturing, the White House imposed a 25 percent tariff on all foreign cars and imported parts entering the country. To ease the impact, the administration introduced a policy allowing companies that manufacture vehicles in the U.S. but rely on imported parts to offset the cost of the tariff.

Get your game on! Whether you’re into NFL touchdowns, NBA buzzer-beaters, world-class soccer goals, or MLB home runs, our app has it all. Dive into live coverage, expert insights, breaking news, exclusive videos, and more – plus, stay updated on the latest in current affairs and entertainment. Download now for all-access coverage, right at your fingertips – anytime, anywhere.