General Motors is abandoning an earlier forecast for solid earnings this year as a result of the uncertainty created by President Trump’s commercial policies, the car manufacturer said Tuesday.
The Trump administration imposed a 25 percent rate on imported cars this month and has said that it will impose a 25 percent duty to the imported parts on Saturday. Around half of the cars that GM sells in the United States in a typical year are manufactured abroad, mainly in Canada and Mexico.
“We are not going to give more guidance to tariffs until we have more clarity,” said company’s financial director Paul Jacobson, at a telephone conference with journalists. “We do not want to get a number of the company that supposes in the midst of what the administration could do.”
He added that GM believed that the impact of the Trump rate “could be material”, which means that they could have a substantial effect on the company’s profits this year.
GM also said Tuesday that he won $ 2.8 billion in the first quarter, a decrease or 7 percent compared to the previous year. The company was affected by a 14 percent drop in profits before interest and taxes in North America, where it generates almost all its profits. His businesses that serve the rest of the world registered small profits.
The company previously said that it hoped to win between $ 11.2 billion and $ 12.5 billion in net revenues by 2025, approximately twice the $ 6 billion that it earned last year.
“You can’t trust the previous guide,” Jacobson said.
In addition to 25 percent tariffs on imported cars, the Trump administration has raised tariffs on imported steel and aluminum, which increases metals widely used in cars. Trump has also increased substantial rates on China and imposed handling rates in many other countries that were later reduced to 10 percent for 90 days.
GM has had “productive discussions” with the Trump administration on rates, Jacobson said, but refused to prepare. “I don’t want you to see me how to negotiate in public,” he said. “We hope to have more clarity about the situation of the rate for the automotive industry.”
The tariffs had a minimum impact on the company’s financial performance on the first quarter because they did not enter into force until April 3, Jacobson said. “The foundations of our business are strong,” he said.
GM previously said it would take truck production in a plant near Fort Wayne, Ind., A movement that Woudd allows you to reduce the imports of trucks from Canada and Mexico a bit.
