The tariffs on steel and aluminum, combined with rising oil prices and inflationary pressures, significantly affect General Motors (GM) through multiple layers of its supply chain. First, steel and aluminum are key raw materials—GM’s production of vehicle bodies, chassis, and many components depends heavily on steel and aluminum inputs (raw materials) which are now subject to steep import tariffs (e.g. 25%–50%) that began in early-to-mid 2025. These cost increases in raw materials directly raise GM’s input costs. ([automotivelogistics.media](https://www.automotivelogistics.media/supply-chain/us-extends-50-steel-and-aluminium-tariffs-driving-auto-supply-chain-risk/654907?utm_source=openai)) Second, many of GM’s components (engines, transmissions, interior parts) are produced by suppliers located in Canada, Mexico, or importing sub-materials from abroad. These ‘intermediate products’ are increasingly burdened by derivative tariffs or border crossings that now incur duties, inflating their cost before GM assembles vehicles. For example, components crossing US-Canada or US-Mexico borders multiple times are being hit by new or reinstated tariffs on steel and aluminum, making even intermediates substantially more expensive. ([automotivelogistics.media](https://www.automotivelogistics.media/supply-chain/us-extends-50-steel-and-aluminium-tariffs-driving-auto-supply-chain-risk/654907?utm_source=openai)) Third, downstream, GM must decide whether to absorb those higher costs, pass them on to consumers through vehicle price increases, or compress its margins. But rising input costs coincide with oil price increases, which also boost transportation, fuel, and energy costs across GM’s operations and logistics. This ‘double inflation’ squeezes GM’s profitability, particularly for lower-margin models. GM’s own disclosures show that raw materials like steel, aluminum, copper, and freight costs have been increasing, with adversities in sourcing and potential shortages threatening production schedules. ([investor.gm.com](https://investor.gm.com/static-files/b1007910-5036-49eb-b233-cad977f4f04d?utm_source=openai)) Finally, the cumulative effect is higher vehicle costs for consumers, potential demand softening, and increased uncertainty in GM’s supply chain strategy—urgency to increase US content, seek alternative suppliers, or redesign products to use less tariff-exposed materials. Such strategic shifts take time and investment, and during the transition period, GM remains exposed to volatility in raw material prices and policy risk. ([fastmarkets.com](https://www.fastmarkets.com/insights/gm-will-absorb-4-5-billion-in-tariffs-retain-current-auto-pricing-ceo/?utm_source=openai))