General Motors CEO Mary Barra revealed on Tuesday that the automaker has contingency plans to mitigate up to 50% of potential tariffs President Trump may impose on imports from Canada and Mexico.
Speaking at a Wolfe Research investment conference, Barra said GM is prepared to absorb 30% to 50% of the additional costs “without deploying any capital” in the short term.
“We are prepared,” Barra said. “When we know exactly what’s going to happenโor even have an indicationโwe know the steps we could take.”
Concerns About Tariffs
GM CFO Paul Jacobson, who joined Barra at the conference, added that if tariffs persist, the company could take further measures, such as shifting production or sourcing parts differently. GM has significant operations in Mexico, including production of its lower-priced electric vehicles and highly profitable full-size pickup trucks, as well as some facilities in Canada.
The comments come after GM’s stock dropped 8% following its quarterly earnings call two weeks ago, where investor concerns about tariffs were not addressed. Barra’s remarks provided the most detailed insight yet into how GM plans to navigate the potential financial impact.
Tariffs Are Creating “Chaos”
Meanwhile, Ford Motor CEO Jim Farley warned that Trump’s tariffsโboth real and threatsโare creating “chaos” for the U.S. automotive industry. Farley criticized the recent 25% tariffs on steel and aluminum, as well as the proposed levies on imports from Canada and Mexico, calling them costly and disruptive.
“President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here, more innovation in the U.S.,” Farley said. “If his administration can achieve that, it would be one of the most signature accomplishments. So far, what we’re seeing is a lot of cost, and a lot of chaos.”
Farley and incoming Ford CFO Sherry House noted that while Ford sources most of its steel and aluminum domestically, some suppliers rely on foreign materials, which could drive up costs. Similarly, Barra said GM is “evaluating” the impact of steel and aluminum tariffs but emphasized that the company sources a “significant” amount of both materials from the U.S. and has fixed pricing in the short term.
Both GM and Ford have contributed $1 million each, along with vehicles, to Trump’s inauguration, and executives from both companies have met with the president to discuss the auto industry.
Farley expressed particular concern about the potential 25% tariffs on goods from Mexico and Canada, warning that such measures could be “devastating” and “blow a hole in the U.S. industry that we’ve never seen.” He plans to travel to Washington, D.C., this week to meet with government officials and stress how policy uncertainty is harming the industry.
“Comprehensive” Approach
Farley also called for a “comprehensive” approach to tariffs, pointing out that automakers like Toyota and Hyundai import hundreds of thousands of vehicles annually from Japan and South Korea with minimal duties, compared to the steep tariffs proposed for Canada and Mexico.
Ford, which regularly highlights its American manufacturing in ad campaigns, is the top auto producer in the U.S., with the most vehicles assembled domestically and exported globally. However, Farley warned that the cumulative impact of tariffs and policy changes could significantly hurt the company’s business.
“We’ll have to deal with it. That’s what I’m talking about cost of chaos. A little here, a little there. โฆ This is what we’re dealing with right now,” Farley said.
The White House has not yet responded to Farley’s remarks. As the auto industry braces for potential tariffs, the focus remains on how these policies will shape the future of U.S. manufacturing and competitiveness.
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