Trump’s Tariffs Are Hitting US Companies Hard

The real cost of Donald Trump’s sweeping tariffs is becoming clearer — and it’s not foreign exporters footing the bill. US companies are bearing the brunt, with several major firms reporting steep profit declines in Q2 2025 due to rising import duties. Economists now warn that while consumers have been shielded so far, price hikes could be just around the corner.

General Motors Takes a $1.1 Billion Hit

On Tuesday, General Motors ($GM) said Trump’s tariffs cut $1.1 billion from its second-quarter profits. The company now expects tariffs to shave $4 billion to $5 billion off its full-year income.

Despite a 7.3% rise in US vehicle sales year-over-year, GM’s net income fell 34%, dropping to $1.9 billion in Q2. Stellantis, maker of Chrysler, Dodge, and Jeep, also disclosed $350 million in tariff costs in H1 2025.

“Automakers are essentially subsidizing car buyers for now,” said Virginia Tech professor David Bieri. “That’s definitely not sustainable.”

Other Industries Also Feeling the Squeeze

$HAL (Halliburton) reported a $27 million hit from tariffs in Q2
Bossard Group, a Swiss fastener manufacturer, said tariffs caused a 10–30% price increase for customers in the US
General Electric ($GE) projects a $500 million tariff impact in 2025, depending on how reciprocal tariffs evolve

Though many companies are absorbing costs for now, experts say that strategy has limits.

“In the short run, profits will soften. In the long run, consumers will pay higher prices,” Bieri warned.

Why Aren’t Prices Rising Yet?

Economists say the delayed impact on consumers is due to a few key factors:

Inventory buffers: Companies stocked up ahead of tariff deadlines
Shipping lags: Products imported before levies took effect are just now reaching shelves
Consumer sensitivity: Firms are hesitant to raise prices after years of inflation

“There’s a limit to how much prices can adjust — especially for big-ticket items like cars,” said Francesco Bianchi, economics professor at Johns Hopkins.

Still, analysts expect many automakers to use 2026 model rollouts to quietly pass on tariff costs, potentially bundling them with new features.

GM: The ‘Canary in the Coal Mine’

GM imports nearly half of the vehicles it sells in the US, more than any of its competitors, including Toyota ($TM), Honda ($HMC), Ford ($F) and Stellantis ($STLA). That makes it especially vulnerable to Trump’s new 25% tariff on auto parts, which he brushed off with the comment: “I couldn’t care less if prices go up.”

To offset the damage, GM announced a $4 billion investment in US factories, but CEO Mary Barra says it will take 18 months for those facilities to ramp up.

Tariffs Becoming a Political and Economic Flashpoint

While the Trump administration argues tariffs protect US jobs and encourage domestic production, companies say the lack of predictability is hurting both planning and profits.

“The real headline this summer will be the growing disconnect between rising costs and flat consumer prices,” said Cox Automotive’s Erin Keating.

Even car dealerships are feeling the pressure. Robert Fogarty, who owns two in Maryland, said many buyers rushed to lock in pre-tariff prices earlier this year.

“We’re taking it day by day. Having clarity would be helpful,” he told The Washington Post.

What Comes Next?

AlixPartners estimates 80% of tariff costs will eventually be passed on to consumers
Companies may bundle price hikes with model refreshes in 2026
If tariffs are sustained, industries will have to choose between margins and market share

Many economists believe the current strategy — eating costs now, raising prices later — will not hold.