Tariffs on aluminum and steel are already beginning to push up costs General Motors top executive acknowledged before the company’s annual shareholders meeting in Detroit.
GM is beginning to see cost increases as a result of the tariffs imposed on aluminum and steel by the Trump administration, GM Chairman and Chief Executive Officer Marry Barra said Tuesday ahead of the company’s meeting.
Barra told reporters that the trade negotiations are still incomplete so it is difficult to have a complete picture of the impact of tariffs will have on the General Motors or the automobile industry in general.
“Clearly there are a lot of moving pieces in trade and the auto industry is a very complex business,” Barra told reporters during a press conference before the meeting. Barra added we need to let the discussions proceed to a conclusion.
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“Clearly we want to maintain affordability in vehicles. We are seeing cost increases. We’re working hard to understand the impact,” Barra said.
Besides placing a 25% tariff on imported aluminum and steel, which has had a direct impact on automotive suppliers, the Trump administration also has floated the idea of imposing a 25% tariff on complete vehicles that are exported to the U.S. from the European Union as well as Mexico, Canada and China where GM builds vehicles, including highly profitable pickup trucks that are sold to customers in the United States.
Barra also said GM has not altered any plans in response to the uncertainty created by the changes in trade policies proposed by the Trump administration. “We haven’t been in a position where have had to change our plans,” she said, adding that GM’s plans for the long term could change.
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A diplomatic dustup between the U.S. and Canada over the weekend could wind up killing the North American Free Trade Agreement, leaving the North American and global auto industry in a lurch.
The U.S., Canada and Mexico had been engaged in last ditch talks in effort to reach an agreement on a replacement for the existing trade agreement between the three countries, which the Trump administration has threatened to junk, claiming it was unfair to U.S. interests.
The GM CEO also said GM isn’t about to abandon the passenger car business. Both of its historic competitors, Ford Motor Co. and Fiat Chrysler Automobiles N.V. have taken steps to reduce the number of passenger cars they sell.
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Barra noted GM has made major investments in compact and midsized passenger cars in 2015 and 2016. In addition, GM has an international footprint that gives the company the flexibility to shift as market demand shifts.