METRO DETROIT (WXYZ) — There is a growing level of economic uncertainty surrounding the North American Auto Industry.
The Big Three are navigating a new era, as they deal with the impact of President Trump's tariffs. So far, General Motors and Stellantis are already feeling the effects, and we are waiting to hear from Ford.
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GM says its second-quarter profits fell by $1 billion, while Stellantis says it lost 2.7 billion in the first half of the year, partially due to tariffs.
Ford will release its second-quarter results a week from today. All this comes as President Trump plans to implement even more tariffs next week.
Industry experts say the auto companies are eating the tariff impacts, and that it's only a matter of time until those costs get passed onto the customers.
These are also the first quarterly earnings reports since the auto tariffs went into effect. Those tariffs were set at 25 percent on foreign-made vehicles and 25 percent on some car parts.
GM says its profit loss is mostly driven by tariffs. Stellantis is blaming tariffs for part of its $2.7 billion drop in the first half of the year.
The President's tariffs meant to bring supply chains back to the U.S. GN is investing $4 billion into U.S. plants, but those cars won't hit the market for another 1.5 years.
Auto industry experts say that while profits are shrinking, companies are going to start raising prices and cutting back on production.
"You're gonna see a lot of entry-level models going away if the tariffs continue on," said Sam Fiorani, Vice President of Global Vehicle Forecasting and Auto Forecast Solutions. "We're gonna to see a lot reduction in choice. We're gonna see a lot of reduction in technologies. And we're gonna to see a higher price on every vehicle."
The cut back on production means a lot more than less models to pick from on the car lot for the Motor City. Experts say the bottom line is that over the next three years, tariffs will reduce car sales and jobs. What's uncertain is how hard the Big Three or Michigan will be hit in the process.
