GM earnings show just how hard tariffs are hitting
Tariffs cost GM more than $3 billion last year and accounted for the majority of the automaker's year-over-year decline in profits
Jeff Kowalsky/Bloomberg via Getty Images
In the presentation touting legendary automaker GM’s quarterly and full-year 2025 results, the word “tariff” appears 14 times. That’s because tariffs cost GM more than $3 billion, gross, last year. Tariffs account for the majority of the company’s year-over-year decline in profits, and this after the company figured out how to mitigate 40% of tariff impacts through pricing and cost adjustments — which highlights just how big the underlying tariff hit was.
Here's what to know.
A significant hit to margins
For full-year 2025, the company’s EBIT-adjusted margin fell to about 6.3%, down roughly a full percentage point from 2024, with net margins sliding in tandem. In North America — GM’s profit engine — margins were weaker still, and the challenge only grew in the fourth quarter, when North America EBIT-adjusted margins dropped to the high-6% range from more than 9% a year earlier.
Government policy weighs on results
The elephant in the room notwithstanding, GM’s CEO Mary Barra makes no direct mention of tariffs in her shareholder letter, instead carefully praising the GM team for “delivering an exceptional 2025 while adapting to significant changes in tax and trade policy.” She further noted that, looking ahead, “we are operating in a U.S. regulatory and policy environment that is increasingly aligned with customer demand.”
The latter statement might be read as a legalistic way of saying “government rules once again favor the big trucks our core North American customers, who drive most of our profits, want.” Even so, Barra added that EVs brought in 100,000 new customers in 2025. “We know these drivers do not often go back to gas,” she wrote, “so we will continue executing our plan to reduce EV-related costs and we remain confident in our path to EV profitability.”
Looking ahead, management promised to deliver stronger margins in 2026—essentially, margin numbers more in line with 2024 than 2025. It’s a tall order, given how unpredictable government policy may be in the coming year and the way these latest results demonstrate how sensitive the industry is to policy changes. Still, Wall Street still welcomed the news. GM shares rose 4% ahead of Tuesday’s market open.