GM's Tariff Tumble: Is This The End of the World As We Know It?

Oops We Did It Again: Tariff Edition

Hey besties Poki here and let's dive into some real world drama – no not streamer drama actual money drama! So GM just dropped a bombshell lowering their 2025 earnings guidance by a whopping $4 to $5 billion. Why? You guessed it: those pesky auto tariffs that Trump put into place are still haunting them! It's like when I accidentally spill boba all over my setup – a total mess that takes forever to clean up except this mess involves billions of dollars. FeelsBadMan.

From Riches to Slightly Less Riches

The numbers are giving me anxiety and you know I try to stay positive! We're talking adjusted earnings before interest and taxes dropping from a potential $15.7 billion to a max of $12.5 billion. It's like going from a Lambo to a… well a slightly less flashy Lambo. Still a Lambo but you get the point! Even their free cash flow is taking a hit. Someone get me some copium.

Mary Barra's Copium Masterclass

But wait there's hope! GM's CEO Mary Barra is out here telling everyone everything is still fundamentally strong. She's adapting to the new trade environment and strengthening the supply base. It's like when I mess up a play in Valorant but then clutch it at the last second – total redemption arc! She even mentioned increasing U.S. sourced parts by 27%. Okay maybe we can still stan.

Tariff Relief: A Band Aid on a Billion Dollar Wound

Apparently the Trump administration made some changes to the tariffs that include reimbursing automakers for some U.S. parts and reducing the "stacking" of tariffs. It's like getting a free refill on your boba after they messed up your order. Nice but it doesn't solve all your problems does it? Still it's something!

Made in the USA… Maybe?

Barra played coy when asked about shifting production from Mexico to the U.S. She's all about leveraging existing assets like those 11 huge assembly plants in the U.S. So maybe we'll see more "Made in the USA" stickers on those cars after all? It would be kinda pog not gonna lie. 'We're going to leverage that footprint that we have because we have the ability to add capacity to many of those plants. So we can do this efficiently and it's going to allow us to do this more quickly than if we were going to start with a greenfield,' Barra said.

The Future is Electric (and Hopefully Profitable)

The big picture? GM is still pushing hard on electric vehicles hoping to drive EV profitability despite all the tariff drama. It's like trying to win a Fortnite match after your internet lags out – challenging but not impossible! As long as they don't start charging extra for heated seats as a subscription I think we'll be okay. Fingers crossed! But hey at least GM isn't blaming *me* for their problems unlike some people when I accidentally snipe them in Valorant. (It was an accident I swear!)