Steel and aluminum prices have risen since the Trump administration imposed tariffs on the two key raw materials for the car manufacturing, steel and aluminum. Those costs could run even higher as President Donald Trump ratchets up his global trade war.
Trump said Wednesday that he was working with European Commission President Jean-Claude Juncker toward “zero tariffs, zero non-tariff barriers and zero subsides for the non-auto industrial goods.“
Key details of the agreement were still unclear late Wednesday afternoon, but a deal not to impose further tariffs while negotiations are underway would avert a trade war between the United States and Europe. It would also represent a victory for the European Union, which had been bracing for new automobile tariffs as high as 25 percent.
Trump did not address whether the two leaders had reached an agreement on car tariffs, though Juncker said that no new tariffs would be assessed as negotiations proceed.
GM Chief Financial Officer Chuck Stevens told analysts Wednesday that consumers will bear some of the increased costs from the tariffs that are already in place.
“To the extent that we have opportunistic ability to pass along some [of the higher costs], we will,” he said on a call with analysts. GM now expects to earn about $6 per share in 2018, down from its previous forecast of $6.30 to $6.60 a share, the company said in reporting its second-quarter earnings.
Car makers aren’t the only companies getting squeezed by the tariffs. The trade penalties have been mentioned in some form on more than 40 percent of the 146 S&P 500 companies that have already reported second-quarter earnings this season, according to data compiled by CNBC.
On Tuesday, shares of Whirlpool plunged by more than 14 percent after the U.S.-based washing machine maker said higher steel costs will crimp its profits this year.
“Global steel cost has risen substantially and, particularly in the U.S., they have reached unexplainable levels,” Whirlpool Chief Executive Officer Marc Bitzer told shareholders during the company’s conference call.
Harley Davidson estimated the tariffs will cost the motorcycle maker and extra $45 million to $55 million this year.
—CNBC’s Leslie Josephs contributed to this article.