Hard hit of more than $1.1B to second-quarter earnings and General Motors’ stock plunge: cause and consequences
The vehicle manufacturer has seen a huge drop in the stock for Q2 of 2025.
General Motors has revealed that tariffs imposed by Donald Trump’s administration sliced an eye-watering $1.1 billion from its second-quarter profits, causing a 3% dip in its stock price.
That throbbing hit knocked GM’s operating earnings down by nearly a third compared to the same time last year, the published numbers revealed.
This shock is yet another glimpse of how Trump’s revived trade war, most notably the 10% tariffs on parts from China and Mexico, are hitting America. And GM said the pain isn’t over either: the company expects the total toll from tariffs this year could hit as much as $5 billion.
“GM lost $1 BILLION from Trump’s tariffs… the damage may only be starting…”
— The Tennessee Holler (@TheTNHoller) July 22, 2025
Reminder: Tariffs are a tax on you. https://t.co/lNr6RqoNpV pic.twitter.com/FDhVqecn1m
Despite the despair caused by Trump’s insane economics, GM isn’t in freefall, proving just how avoidable all this is. Revenue held at $47 billion, and sales in the U.S. rose 7%, thanks to strong demand for trucks and SUVs.
Such a huge company, unlike smaller businesses in the States that are also feeling the squeeze, had the foresight and raw cash to somewhat soften the blow against foreign dollars: GM has been pumping money into U.S. factories. In June, it spent $4 billion on plants in Michigan, Kansas, and Tennessee to dodge tariffs.
CEO Mary Barra said these moves were part of a longer-term strategy, saying the company is “positioning itself to thrive” given ever-changing economic and political winds from Trump’s trousers. However, despite the positive outlook from the CEO, Reuters report that “GM may need to cut investment in future projects or find other ways to trim spending to offset the effect of tariffs.”
Trump says 19% tariffs will go into effect on goods from the Philippines, another trade “deal” that leaves us orders of magnitude worse off than before Trump took office pic.twitter.com/I43J7UjIQb
— Joey Politano 🏳️🌈 (@JosephPolitano) July 22, 2025
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Trump’s tariffs are scaring the business world, with Joseph Foudy, an economics professor at the New York University Stern School of Business, telling Al Jazeera that “when you start to see tariffs at 20 or more, you reach a point where firms may stop importing altogether,” adding that “the uncertainty around trade in that sense is as costly as the actual tariff rates.”
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