General Motors (GM) reported on Wednesday that they will post fewer earnings than they originally anticipated. The forecasted drop stems from the increase of aluminum and steel from President Trump’s tariffs.
In fact, according to RushHourDaily, their costs are expected to rise $500 million to a whopping $1 billion. However, CFO Chuck Stevens did admit that the tax reform bill and the low unemployment rate will both help the company with its expenses.
He explains, “What happens beyond 2018, there’s a lot of uncertainty in this space at this point in time.”
The tariffs have increased expenses for many companies and have even forced some companies to move their warehouses abroad to keep prices down. Because President Trump adopted a tit-for-tat policy, other countries are following suit and are increasing tariffs by the same margin.
GM’s stock has fallen over two percent on the day and has risen just three percent in the past twelve months. GM’s stock has been volatile over the past five years, seeing highs and lows every year. However, if the tariffs do not fall soon, then they will likely see their stock value continue to fall.
Many automobile companies are seeing their profits slide because of the tariffs, and this trend will likely continue unless they move to a new country or the tariffs drop.
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