Business Insider reported on Sunday that even if GM passes on half of the costs to consumers, margins will decrease and ultimately impact is financial performance. Charlie Chesbrough of Cox Automotive explained that consumers may see a $100 increase in the cost of a new car due to the tariffs, which shouldn’t impact consumers too much.
The analyst said costs for producing a $30,000 cars will likely rise by $200. If GM were to pass along $100 of the cost increase, it would hold onto the other $100. Considering GM sold 3 million cars in 2017, GM could be in for a $300 million hit that will impact its bottom line.
GM said in a statement after President Trump announced the 25 percent tax on foreign steel and 10 percent tax on imported aluminum that it purchases the vast majority of its steel from U.S. companies. GM product chief, Mark Reuss, also said the automaker’s mixed-material strategy should help alleviate major costs.