One month after Trump initiated a set of tariffs that were more onerous than the Smoot-Hawley tariffs that exacerbated the Great Depression, GM issued new guidance, revising their previous projection for 2025 net income of $11.2 billion to $12.5 billion down to $8.2 billion to $10.1 billion. Many in MAGA bleated their typical line of fake news in response to the automaker revising their guidance down by the cost of Trump’s tariffs, and it should be interesting to see how these folks respond now that this guidance has translated to actual depressed earnings (assuming they’re still sticking with Trump’s lies and aren’t consumed by his Epstein betrayal).
This is only the beginning. GM said they think their third quarter will be worse, as part of their second quarter surprise to the upside came from a familiar theme: consumers front-running Trump’s tariffs to buy things ahead of a time where they plan not to buy things when those items are more expensive. The automaker has moved some production to the United States to try to mitigate some tariffs, like moving the Chevrolet Blazer from a Factory in Mexico to one in Tennessee, but on the whole, a gigantic multi-billion-dollar company is just not able to move its production as quickly as Trump wants. There’s a reason that the ten-year Treasury Note is the interest rate that makes the world go round, and part of it is because long-term capital expenditures are planned on the order of decades, not months. GM has done about as much as it can in 2025 to avoid getting hit by Trump’s tariffs, and it saw its net income shrink by over a third and expects it to get worse.
If MAGA thinks GM is the only company whose net income will be affected so dramatically like this, I have some DOJ-approved Epstein binders I’d like to sell them. General Motors is something of a canary in the coal mine, as any company smaller than them theoretically should have more problems with Trump’s tariffs, which ultimately is the headline here.
If General Motors and Walmart cannot eat the cost of Trump’s tariffs without obliterating their bottom line, what hope do smaller businesses have? This is the core fear around Trump’s desire to implement debunked 19th century economics. If modern capitalism has taught us anything, it’s that the goliaths will survive any and all conditions because the game is rigged in favor of them. The concern lies with the smaller businesses who do not have the White House on speed dial, and who cannot afford to buy Trump’s crypto in droves to exempt themselves from the patronage system he is setting up through these tariffs.
Trump has ten days to make the deals he’s been promising since April, or else the world will go back to the tariff rates Trump first implemented to crash the market a few months ago. That is, unless he caves yet again, furthering this dip in consumer confidence that tracks along his incoherent tariff regime, slowing the economy and hiring along with it, and now, corporate earnings.
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