General Motors is trying to wean itself off of China. A new report alleges that the automaker has told suppliers to begin sourcing raw materials and parts from other countries.
According to Reuters, the automaker is actually doubling down on efforts started late last year to force suppliers to move production out of the country. Political tensions between the United States and China have been rising in recent years.
The US effectively banned imported Chinese electric vehicles last year by applying a 100 percent tariff. This year, US President Donald Trump has used tariffs as a negotiating tactic, making it challenging for the industry to operate with such uncertainty. Automakers are investing in US manufacturing, but China remains an integral part of the automotive supply chain for now.
Sources “familiar with the matter” told Reuters that the Detroit-based automaker prefers getting parts from North America. The company has “been working now for a few years to have supply chain resiliency,” GM CEO Mary Barra said during last month’s quarterly conference call.
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The automaker has allegedly given its suppliers a 2027 deadline to move sourcing for materials outside of China, but it won’t be an easy task. The automotive industry has entrenched itself in China over the last 25 years, and it’ll take time to find new countries, unwind old operations, and start anew. This process will be costly, and the costs will likely be passed on to the consumer.
New cars are more expensive than ever, and reports suggest that tariffs and other economic uncertainties may make it harder to sell affordable cars in America. While GM might want suppliers to act fast, it’ll likely take several years before companies can find alternative countries.
GM’s directive also includes suppliers to avoid countries like Russia and Venezuela, but it’s unclear if there are others beyond those three.