GM wants parts makers to pull supply chains from China

GM executives have been telling suppliers they should find alternatives to China for their raw materials and parts. THE CANADIAN PRESS/Chris Young

DETROIT — General Motors has directed several thousand of its suppliers to scrub their supply chains of parts from China, four people familiar with the matter said, reflecting automakers’ growing frustration over geopolitical disruptions to their operations.

GM executives have been telling suppliers they should find alternatives to China for their raw materials and parts, with the goal of eventually moving their supply chains out of the country entirely, the people said. The automaker has set a 2027 deadline for some suppliers to dissolve their China sourcing ties, some of the sources said.

GM approached some suppliers with the directive in late 2024, but the effort took on fresh urgency this past spring, during the early days of an escalating U.S.-China trade battle, the sources said. GM executives have said it is part of a broader strategy to improve the company’s supply chain “resiliency,” the sources said.

Geopolitical tensions between the two superpowers have left car executives in triage mode throughout 2025. U.S. President Donald Trump’s on-again, off-again tariffs and bouts of industry panic over potential rare-earth bottlenecks and computer-chip shortages have auto companies rethinking their ties to China, long an important source of parts and raw materials.

Automakers and suppliers have responded to Trump’s push for investment and jobs by taking early steps to expand U.S. factory work. But industry executives say they also sense a longer-term, bipartisan shift in U.S.-China relations, and some are moving to unwind China ties that are decades in the making.

The GM effort targets parts and materials that go into cars built in North America, where the company makes the majority of its vehicles globally. GM prefers to obtain parts from North American factories for vehicles built in the region but is open to non-U.S. supply lines outside of China, the sources said.

GM’s directive includes several other countries that, like China, are subject to U.S. trade restrictions because of national-security concerns, such as Russia and Venezuela. China is by far the largest source for automotive parts on the list.

The automaker already had been among the most active car companies in weaning itself from a reliance on China for battery materials and computer chips. It has partnered with a U.S.-based rare-earths company and invested in a lithium mine in Nevada for future electric-vehicle battery materials, for example. But the latest effort is broader and includes more basic components and materials.

A GM spokesperson declined to comment on the company’s discussions with its supply base. GM CEO Mary Barra has described efforts to move more of the company’s supply chain to the U.S.

“We’ve been working now for a few years to have supply chain resiliency,” Barra said during GM’s quarterly conference call in October, adding that the automaker tries to source parts in the same country where it builds the cars, when possible.

Shilpan Amin, GM’s global purchasing chief, said at a conference last month that the risk of supply disruptions has forced the automaker to move away from simply tapping the lowest-cost countries.

“Resiliency is important — making sure you have more control over your supply chain and you know exactly what is coming where,” he said.

Carmakers fret over tariffs, parts shortages

The U.S. and China agreed to roll back a number of tariffs and export barriers following a meeting in late October between Trump and Chinese President Xi Jinping. Still, auto executives have grown tired of the volatile trade dynamics between the countries and the fallout on their supply chains, in an industry where product-planning cycles stretch many years.

Parts suppliers and carmakers already had been tilting their supply chains away from China to avoid tariffs put on during Trump’s first term. This year, a barrage of China tariffs unleashed soon after Trump took office triggered a series of counterpunches from China.

In April, China clamped down on exports of parts that contain rare-earth elements that are used extensively inside cars, sending auto companies racing to stockpile components. In October, China added restrictions on shipments of more rare-earth elements.

Worries over potential factory disruptions flared again late last month, when an intellectual-property dispute between Chinese and Dutch authorities led China to halt shipments from supplier Nexperia, which sells cheap computer chips that go into electronics in cars worldwide. The move prompted industry warnings of widespread factory interruptions.

Rewiring supply chains can take years

For parts suppliers, re-routing supply chains outside of China can be costly and complex. China has become so dominant in some areas of the automotive supply chain – such as lighting, electronics and tool and die makers, which forge custom components – that it is hard to find alternatives, supplier executives say.

“It’s a big effort. Suppliers are scrambling,” an executive at one large parts maker said of GM’s initiative.

Collin Shaw, head of MEMA, the Vehicle Suppliers Association, said car companies and big suppliers have been working to “de-risk” their supply chains by cutting back on content from China and some other countries. But the network of commodity parts and raw materials inside China is deeply rooted, complicating efforts to find alternatives.

“In some cases this has been 20 or 30 years in the making, and we’re trying to undo it in a few years,” he said. “It’s not going to happen that fast.”

(Reporting by Mike Colias in Detroit; Editing by Brian Thevenot and Matthew Lewis)