US President Donald Trump’s harsh tariffs on steel and aluminum are increasing costs for US auto giant General Motors but the company is examining the fallout, GM’s chief executive said Tuesday.
‘Clearly we want to maintain affordability in vehicles. We are seeing cost increases,’ CEO Mary Barra told reporters ahead of the company’s annual shareholder meeting.
‘We’re working hard to understand the impact’ of the tariffs, she said noting it was too early to tell for sure as there are ‘a lot of moving pieces in trade and the auto industry is a very complex business.’
Barra also said negotiations to revamp the North American Free Trade Agreement, the premise for the continent’s integrated auto supply chain, were incomplete, meaning the outlook was uncertain.
Trump last month allowed punishing border taxes of 25 percent on steel and 10 percent on aluminum to take effect for America’s largest suppliers, prompting retaliation from Canada, Europe and Mexico.
The NAFTA talks have been hung up on the US demand to increase the US-made content in autos that receive duty-free treatment.
The Institute for Supply Management reported this month that the tariffs and threatened counter-measures already were jacking up metals prices, causing supply interruptions and order backlogs.
The White House is also considering tariffs on imported autos, which would throw a wrench in hundreds of billions of dollars in annual cross-border trade.
Barra said despite the trade uncertainty, the company so far had not had to shift course for the longer-term.
‘We haven’t been in a position where we have had to change our plans,’ she said.