① The White House press secretary stated on Tuesday that the threat of tariffs imposed on Canada and Mexico starting February 1 remains valid; ② General Motors has established an Industry Chain layout in Mexico and Canada, and its stock price plummeted after the release of Earnings Reports on Tuesday; ③ The company indicated that it has prepared contingency plans for potential situations but hopes to proceed cautiously.
On January 29, Financial Associated Press reported (Editor: Shi Zhengcheng) that in the face of the USA's threat of "25% tariffs on Canada and Mexico starting February 1," General Motors, which has an Industry Chain presence in both countries, stated this week that it will inevitably be affected, but it has prepared response plans.
As background, Trump indicated last week that he is considering imposing tariffs on Mexico and Canada starting February 1. In a press conference on Tuesday this week, White House press secretary Caroline Levitt also stated that Trump's threat "remains valid."
Levitt said, "As far as I know, when I spoke with the President last night, the plan for tariffs on February 1 is still in place."
Considering the unpredictable style of the Trump administration, combined with previous tariff confrontations with Colombia, it is now difficult to predict the outcome of the weekend. $General Motors (GM.US)$ After releasing earnings reports that exceeded expectations on Tuesday, the stock fell nearly 9%, partly due to the uncertainty surrounding tariffs.
General Motors' Chief Financial Officer Paul Jacobson stated during a conference call on Monday evening that they already have a "comprehensive response manual" on hand, but these options will not be implemented until "there is a significant global change and future tariffs are seen to remain at a permanent level."
Jacobson emphasized: "We have been preparing for this and hope to ensure that we act cautiously and do not overreact."
In 2024, General Motors will produce nearly 0.9 million vehicles in Mexico, the highest among all auto manufacturers, with the majority being shipped to the USA. The company is also producing some electric pickup trucks and delivery vehicles in Canada.
After announcing the earnings reports on Tuesday, CEO Mary Barra stated that the company could increase production capacity at its domestic pickup truck plants and ship pickups produced in Canada and Mexico to other countries instead of the USA.
Barra said: "We are fully committed to coordinating the supply chain, logistics network, and assembly plants to prepare for mitigating the short-term impact of tariffs."
General Motors expects a net income of between 11.2-12.5 billion USD for the fiscal year 2025, but this figure does not include potential tariff or other policy impacts.
In addition to tariffs, the Trump administration's policy goal of eliminating electric vehicle tax credits is also a potential bearish factor for General Motors.
The Bank of Canada will make an outlook announcement.
Facing the threat of tariffs, the Bank of Canada will announce its latest interest rate decision on Wednesday, with the market expecting a potential 25 basis point cut.
The Governor of the Bank of Canada, Macklem, called trade threats a "major new uncertainty" in December. He also stated that a forecast regarding the impact of Trump's tariffs would be disclosed before February 1.
In 2019, the Bank of Canada simulated the scenario of the USA imposing a 25% tariff, while Canada and other countries took retaliatory actions. The predicted result was a 25% depreciation of the Canadian dollar, alongside an economic recession and rising inflation.
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