General Motors cheered on President Donald Trump for working with the company to refine auto tariffs, but warned that sustained protectionist policies could “significantly” hurt the industry down the road. 

Trump signed a March executive order implementing a 25% tariff on foreign-built vehicles starting April 3, with a few key auto parts subject to a tariff starting May 3. However, the president is expected to sign an executive order on Tuesday designed to soften the effects of those tariffs, according to reports. Import levies placed on foreign-made cars will reportedly not be subject to other tariffs, and some tariffs on foreign parts used on domestic cars could be removed as part of the order.

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GM CEO Mary Barra, whose company has had conversations with the White House regarding tariff policy, celebrated the policy change in a statement to the Detroit Free Press. 

“We’re grateful to President Trump for his support of the U.S. automotive industry and the millions of Americans who depend on us. We believe the President’s leadership is helping level the playing field for companies like GM and allowing us to invest even more in the U.S. economy,” Barra said. “We appreciate the productive conversations with the President and his Administration and look forward to continuing to work together.”

GM, the largest U.S.-based automaker, sold 2.7 million vehicles last year. This week, it reported a 6.6% drop in quarterly profit, partly due to a $400 million increase in costs tied to depreciation, amortization, warranty expenses, and higher labor costs. GM also faced production hurdles with pickups and SUVs in the quarter ending March 31.

During an earnings call with reporters Tuesday, Chief Financial Officer Paul Jacobson said GM’s profit margins hadn’t felt the effects of Trump’s tariffs thus far. However, he warned the auto industry could face steep repercussions if the White House implements the tariffs long-term. 

“We did have some minimal costs related to tariffs in the quarter. It’s pretty minor across the board,” he said. “We believe the future impact of tariffs could be significant.”

He also gave an update on the company’s profit projections for this year. In January, before Trump unleashed global tariffs, GM expected net profits to range from $11.2 billion to $12.5 billion in 2025. GM said it would need to reassess profit projections in the wake of the tariffs. 

“We’re telling folks not to rely on the prior guidance, and we’ll update when we have more information around tariffs,” Jacobson said. “We can’t rely on the guidance we have issued before, because it might be material.”

The relaxed trade policies expected to be revealed by Trump on Tuesday include an announcement that all cars finished in the United States that are made with 85% domestic content will not be under tariffs, according to Bloomberg. In addition, automakers paying Trump’s tariffs on imported cars, which went into effect this month, will not be obligated to pay other duties he has implemented, such as those on steel and aluminum.

GM and other firms, such as fellow Big Three automakers Ford and Stellantis, will be able to obtain reimbursement for fees they have already paid.

Automakers will also be reimbursed for tariffs on foreign-made auto parts, which are set to go into effect on May 3. The reimbursements would amount to up to 3.75% of the value of a U.S.-made car for one year.

Ford and Stellantis also praised Trump’s move to relax duties this week.

Ford welcomes and appreciates these decisions by President Trump, which will help mitigate the impact of tariffs on automakers, suppliers, and consumers. We will continue to work closely with the administration in support of the president’s vision for a healthy and growing auto industry in America. Ford sees policies that encourage exports and ensure affordable supply chains to promote more domestic growth as essential,” Ford CEO Jim Farley told the Washington Examiner.

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“As the right policies are put in place, it will be important for the major vehicle importers to match Ford’s commitment to building in America. If every company that sells vehicles in the U.S. matched Ford’s American manufacturing ratio, 4 million more vehicles would be assembled in America each year. The U.S. would see a windfall of new assembly and supplier factories and hundreds of thousands of new jobs,” Farley continued.

Stellantis Chairman John Elkann echoed those remarks in a statement to CNBC: “Stellantis appreciates the tariff relief measures decided by President Trump. While we further assess the impact of the tariff policies on our North American operations, we look forward to our continued collaboration with the U.S. Administration to strengthen a competitive American auto industry and stimulate exports.”