With the second Trump administration’s trade policies roiling global markets and the automotive manufacturing landscape, many are wondering whether automakers can continue to import affordable models from overseas, sell them in the U.S. at a reasonable price, and still make a profit. A few prime examples of this quandary are the most affordable USDM GM models, namely its subcompact crossovers: the Chevy Trax, Chevy Trailblazer, Buick Encore GX, and Buick Envista, all of which are made in South Korea.
This very question came up at the Bernstein 41st Annual Strategic Decisions Conference 2025 last week, in which GM CEO Mary Barra and GM CFO Paul Jacobson participated in a Q&A.
“It’s a little bit of a wait-and-see approach,” Jacobson told a participant asking about the future of affordable GM models imported from Korea to the U.S. “We’re still contribution margin positive on them. I think we’re optimistic that as the [Trump] administration continues to work with other countries on bilateral deals, that Korea is gonna be an important trading partner.”
Jacobson continued: “I don’t think we want to rush to make any decisions about the long term while we’re in this position where it’s sitting at a 25% tariff. I would say that the highest likelihood is that it’s going to be lower, and we’ll be able to assess that from that standpoint. But the business we have over there is really strong. The vehicles have probably never been better in terms of what we’re bringing over, and, I think there’s still a lot of opportunity there.”
Paul Jacobson
So, for the time being, it’s business as usual for GM subcompact crossovers in the U.S. market. They’ll continue being available, presumably at affordable prices, while GM expects a favorable trade deal to be struck between South Korea and the United States.
The Trump admin has made new deals with some trade partners, including the UK, but South Korea hasn’t been one of them. According to Jacobson’s comments, he seems to think it’s a matter of time until that happens, and, when the dust settles, GM will continue to be able to turn a profit selling Korean-built crossovers in the States while keeping the pricing affordable.
Comments
Trump is putzing around with his crazy idea-of-the-moment issues when he needs to be looking at deals with Mexico, Canada, South Korea and Japan above all else. He’s just so easily distracted, it’s pathetic.
So naive to assume that the tariffs will vanish or be reduced and that the company will not have to repatriate a significant amount of work back to the US like other automakers are doing. But what’s new with this company?
GM, or any automaker, would not be able to sell any of these 4 at the current prices if they were made in the US. Tariffs eventually will go away because Trump won’t be reelected (he can’t be) and he’ll more than likely reduce them before that, when he gets around to it. His polling numbers (which he’s probably banned by now) have to be very close to zero.
No these vehicles can be made here in the USA for an affordable price! Enough is enough there are people in this country begging for a job even if it’s four days a week and part time! I work two part time jobs I have for 27 and it’s always worked out for me. This corporate greed has to stop hire American workers heck I would buy these GM cars even if they where made in Mexico!
You forgot to add the 1 1/2 million people identified in the OBBB. Who are able bodies but only are required to prove they have a job once a year to receive full Medicare/SNAP and housing benefits, or the half of the 2 million federal civilian workers who will be let off over the next 4 years. That’s 2 1/2 million workers that will be moving into manufacturing.
Really? I do recall the article states,
“We’re still contribution margin positive on them.”
So their making money with these despite selling them for 22-26K, and 25% going to the tarrifs. They can then afford to fire lordstown back up and make them here and still make a profit. They just don’t want to because the money overlords “believe” manufacturing in America is a lost cause.
Sorry to hear you’ve been in a bubble, but reality is his polls for the last month have been tied with his numbers after the 2017 jobs act was passed and that’s the average with all the normal pollsters, (Harris, Gallup, Rasmussen and real clear)
Similarly the two front runners for 2028 are JD Vance and Desantis. So expect the tarrifs to stay. Favorite Democrat is Mayor Pete, followed by Kamala again believe it or not. Not a good show for 2028, and definitely not a good bet that the tarrifs will drop below 10% for the next decade.
They had no problem selling Lordstown Ohio built Cruzes or Cobalts or Cavaliers before them at affordable prices. And that is not counting the Pontiac versions of those.
I said it before and I will say it again. Excuses are like @$$holes. Everyone has one. And since each of us have one, they can spare us the excuses.
Anyways, its looking like their future in Korea is in question which is a guarantee they will look to pull out of their so start building them here once that 2027 contract is up.
To the many downvoters, I challenge any of you to provide a counter argument to the fact I stated about how GM did fine producing previous compacts in places like Lordstown and still managed to sell them at economic prices. Or how Hyundai, Toyota, and Honda are able to till this day produce Elantras, Tucsons, Corollas, Corolla Cross, Rav4, Civics, and CR-Vs at competitive prices.
Come on. Show me your downvotes have weight to them. This is America. Don’t be afraid to counter argue and don’t take that right for granted since many of you are longing for the defeatist way of forging forward and we should all just continue to allow our country to whither away our manufacturing and be at the mercy of an adversary.
If what ever the amount of the tariffs end up to be-they will be around for a while. For those who understand supply chain management and manufacturing-they know you can’t move a car manufacturing plant and their suppliers on a whim of a president.
Clearly-those who build office buildings, casinos, and resorts/golf courses
don’t understand supply chain management and auto manufacturing,
You’ve confused me. If the tarrifs are here to stay, probably be smart starting moving manufacturing back right? Get a headstart?
See Ricks reply below.
And there it is… no car manufacturing coming back to the ol’ USA.
gm can – and will – wait it out.
Sad.
And yet, why do I get the impression that if they say that they won’t, the current administration and the likely next administration will just jack up the tarrifs even more??? Just be a market leader and move already! When the WEF overlords said we’re going EV, GM Ford even WV threw up dozens of factories in the USA, some that right now are standing empty, totally a waste. It’s not that they can’t, it’s not that it wouldn’t be good for them, it’s that they WONT! Why they won’t only leads to conspiracy theories, but these days the difference between conspiracy theory and a proven conspiracy is 18 months and an investigation.
Except bringing manufacturing back isn’t the whim of a president. It’s actually been predicted as NECESSARY to happen for the US for many years in geopolitical analyst circles. Say what you want about Trump, but thank God he’s making some of these deals for the US instead of some of the other possible politicians. This really will help us in the mid and long term and it is 100% needed and has been predicted for a long time coming.
Biden was continuing the tariffs. He never removed them. In fact, he passed his own ontop of Trumps tariffs that were already in place. If you ask me, this isn’t a Trump only goal. But a general US establishment goal to decouple.
I think we had this conversation before on how Peter Zeihan predicted the US would lose interest in providing global security and focus more inward. Much of it attributed to the demographic collapse of many nations. We are seeing this happen now as we speak.
The media, and their bashing of these policies, is there to put on a show for the people. But both sides of the aisle are very much doing this. Maybe each side has a different way of going about it.
I suspect few of the commentators to this article actually worked in automotive manufacturing engineering for general motors. I did for 30 years (retired now). Please do a Google search on what contribution margin means. If you moved all the tools and equipment to the US, incurred all the downtime and expense of installation, re-established all the suppliers, tackled the logistics of parts delivery, and were successful getting paint shop permits through the EPA (the closed plant being re-opened may have old non-compliant emission equipment) – you will have greatly increased your fixed costs. This will drag down profits. Then hire American workers and watch your variable costs rise. The management above my pay grade have tough decisions to make regarding all this. Bringing car production back to the US is admirable. You can say the same for moving iPhone manufacturing to the US.
Rick,
Unlike many above you know exactly what you are talking about. You can just move manufacturer and supply chain management. The auto manufacturers will wait out the 4 years.
Except the other party has become the party of mentally ill women and weak men. They are losing voters and supporters by the day, MORE of their politicians are turning away and joining the right as I type. They just spent $20M and had a webcast to try to figure out how men speak to each other. They can’t define a woman. They want a left Joe Rogan, who WAS (and some issues still is) left. They are lost and at this point in time I don’t think 4 years will be enough time for them to turn their ship around. 12 more years of what you see now is very possible.
Also, nobody expected an instant homegrown supply chain. And honestly, what you are MORE likely to see are REGIONAL supply chains get built. Think North America, Central America, probably down into South America as an economic region. Other regions of the world will likely build their own regionally supply chains.
Hell, even the US military tackling the cartels in Mexico was predicted as a thing YEARS ago by these same geopolitical analysts, if Mexico didn’t handle it themselves. Much of what these analysts said would happen is happening now.
This is all a part of demographics, where resources are, when they need to go for processing, and where they need to go to get to the end user. The post-WWII, Bretton Woods way of doing things is changing.
If you are surprised by this, it’s your own blind spot.
John,
What you are more likely to see is the auto manufacture’s waiting 4 years. They are not uprooting what’s in place. They will wait.
CKN, that’s definitely what their WEF masters want them to do.
This defeatist attitude is what will do us in as a country. These folks preaching about how we cannot alter supply chains but seem to forget that countries like China weren’t manufacturing hubs back in the 70s. It took time and investments and nobody even thought they could manufacture there. And here they are. Now, nobody wants to put in the effort to safeguard our home. Because hey. It won’t be their problem anyways. But it will be our kids problems.
To these defeatist people I say this. Enjoy your complaining about your leaders actions. Enjoy your right to criticize. Enjoy your perk of insulting those that don’t see eye to eye with you. Enjoy all that. Enjoy what you take for granted as an American. Because one day, you may not have it anymore and the day you decide to criticize a ruling party, you will be visited by men who can take you to a re-education camp. Or maybe not a trip to that camp and instead you will be dealt with in that moment. And it starts with the fall of a country and its democracy. Don’t believe me? Ask my parents who lived through it before immigrating to the US to escape it.
And the supposed new leader of that world, a certain country known for intense surveillance of their own people, loves propping up men like Kim, Putin, and Maduro. So again. Enjoy your perks.
Kind of a naive way of doing things. There is no guarantee that the next administration will do away with the tariffs. In fact if they tried, the other side can argue doing away with tariffs are destroying American jobs.
I bet they said that back when the Chicken Tax first passed. 61 years later and they are still waiting?
Rick, you are right and anybody working in the industry for so long, understands what are the challenges facing the move of existing facilities and supply chain across the ocean. But you are trying to explain this to people who are still dreaming about the re opening of the GM Lordstown OH plant, a plant built in the nineteen sixties.
It’s definitely not easy, but it needs to happen. The world is changing.
Hmmm, river rouge makes the F150, and it was built in the 20’s, expanded in the 40’s and again in the 50’s. Yet it’s still produced the #1 selling model in the world.
Stupid point.
Also, it’s funny you mentioned iPhones. YEARS ago when analysts starting making these predictions, Apple being so heavily involved in China was a big talking point back then.
I think the lack of foresight and just being such out of touch Boomers is biting a lot of large corps in the butt right now. Although, the people that own their companies are much, much worse.
And gm is right at the top of those naive companies.
Right on. And GM is subject to those absurd UAW wage contracts.
None of this would be an issue if Barra and company were not so hellbent on moving US jobs to low wage countries. They almost seem proud of the fact that they are the largest importer of vehicles in the US. The low-wage nations get the volume product while US plants sit idle and underutilized building EVs that are a small part of the market
Tigger, I do believe you are a Socialist. Nobody makes entry level vehicles in the US because it is too expensive. You are basically asking GM to become a non-profit, all for a few jobs in dying areas of the US. The US has a huge labor shortage, you just need to MOVE to where the jobs are.
Grand idiot GTP……
Toyota Corolla – made in Mississippi
Boom……
Go read a book.
I believe you are a communist believing US manufacturing should move to countries like China that employ slave labor in 1800s style sweatshops all so you can save a few bucks buying more stuff.
Not to worry…if you don’t like today’s tariff policy, simply wait a while, it’ll change. Because T.a.c.o.
Ah yes, “Trump Always Chickens Out”. The man that was shot in the head and stood up yelling fight fight fight (you can’t fake that), the man who stood and stands up to bullies in global politics and global business, the man who has been the largest target of lawfare and propaganda ever seen, is a chicken.
The side that has shown themselves to be mentally ill women and weak men the last 4 years, some still cowering behind masks, calling someone a chicken, hilarious.
“The side that has shown themselves to be mentally ill women and weak men”. Wow. I see Nate Silver’s mental healthy study is making the rounds today. The stats are worse than I thought, shocking, and genuinely sad. The left are insane, literally.
The President knows what he’s doing. Keep the faith.
“Wait and see” = Hope that the next President doesn’t support tariffs so we can keep making cars in S Korea, ship them 6400 miles across the Pacific, and then lecture consumers about having to buy EVs.
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