General Motors said Tuesday it expects to receive $500 million in tariff refunds from the federal government after the Supreme Court struck down some of President Trump’s tariffs.
The expected refund helped boost the automaker’s profit in the first three months of the year. GM said it made a profit of $2.6 billion in the quarter, representing a 6% decline from the same period last year.
In February, the Supreme Court ruled that Mr. Trump had exceeded his authority by imposing tariffs under the International Emergency Economic Powers Act of 1977, which grants the president certain powers during a national emergency. The administration this month implemented a system through which businesses can request reimbursements.
For GM, the expected refund helped ease the negative impact of falling vehicle sales and billion-dollar expenses related to GM’s decision to cut electric vehicle production.
GM Chief Executive Mary T. Barra said the company’s “operational performance remained strong,” driven by strong sales of trucks and small sport utility vehicles, as well as improvements in its China operations.
But it warned that the war in Iran was increasing costs and that the recent war-related rise in gasoline prices could dampen sales of its profitable pickup trucks. However, demand for these vehicles remains strong so far.
“The No. 1 thing we’re watching is what’s happening with the Iran conflict,” Ms. Barra said in a conference call with analysts and reporters. “But we think it’s prudent to wait and see how events unfold before making any changes” to GM’s earnings outlook.
The company is also affected by other tariffs – including those on imported steel, aluminum, cars and auto parts – that Mr. Trump imposed under Section 232 of the Trade Expansion Act of 1962. Those tariffs, which were not covered by the Supreme Court ruling, remain in effect.
GM said it now expects to pay import duties of between $2.5 billion and $3.5 billion in 2026, up from a previous range of $3 billion to $4 billion.
The company said its first-quarter revenue fell slightly to $43.6 billion. Global vehicle deliveries fell 10 percent to 1.3 million cars and light trucks, partly due to a decline in electric vehicle sales in the United States.
Demand for electric cars plummeted last fall after Congress and Mr. Trump ended tax credits for electric vehicle buyers. As a result, GM and other automakers are making fewer battery-powered cars.
GM is converting a factory in Orion, Michigan, to make internal combustion vehicles rather than electric vehicles. The company incurred a $1 billion expense in the first quarter as a result of the change.
