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GM looks like a 'net winner' if Trump's auto tariffs happen (GM)

GM could benefit from potential auto tariffs President Donald Tump may place on foreign trade partners.

  • President Donald Trump is considering a 25% tariff on imported autos.
  • This could be a tailwind for
  • But there's one caveat.
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Beneath all of the rubble and noise about the US's trade negotiations with foreign partners are a few corporate winners in the US. One of those winners could be General Motors

On Wednesday, President Donald Trump announced he's considering a tariff of up to 25% on imported autos. And according to Charlie Chesbrough, senior economist at Cox Automotive, GM is "probably more on the winning end, because they get the majority of their vehicles produced domestically."

Chesbrough pointed out that even some US automakers could be hurt by the tariffs, because those companies produce cars abroad that are then sold in the US. If the tariffs apply to those vehicles, US automakers get hurt.

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However, GM isn't in that boat. It makes roughly 80% of its vehicles in the US, according to Made in America Auto Index. That means those vehicles wouldn't be exposed to the tariffs, and therefore wouldn't see a drop in demand. Plus, GM could enjoy higher prices on those vehicles as foreign competition is kept out. By comparison, Ford, GM's biggest competitor, produces just 64% of its vehicles in the US.

But there's one caveat to all of this: retaliation. If the countries subject to the tariffs retaliate, things won't be looking so great for GM. "If there's no response and other countries take it on the chin, GM is going to be a net winner to this, but we have to assume there could be a response," Chesbrough said.

While Chesbrough thinks "the likelihood of these things going into effect is pretty minimal," US Commerce Secretary Wilbur Ross insists that the auto tariff threat is a response to national security concerns.

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