GM pushes its suppliers to turn the page on China

General Motors has asked several thousand of its suppliers to clean up their supply chains of parts from China, according to information obtained by Reuters from corroborating sources. The American automaker is seeking to reduce its dependence on Beijing amid growing geopolitical tensions. The goal is to completely exit China by 2027 for certain suppliers.

The warning was first issued at the end of 2024, although the offensive took on a more urgent tone in the spring of 2025, with the escalation of the trade standoff between Washington and Beijing. GM justifies this shift by the need to strengthen the "resilience" of its supply chain. Its executives are encouraging suppliers to turn to other countries outside China for the supply of raw materials and spare parts.

Throughout 2025, automakers had to juggle the ups and downs of Sino-American relations. Between new rounds of tariffs imposed by Donald Trump and fears of shortages of rare metals and electronic chips, the sector was on constant alert. Several groups have begun to relocate part of their production or diversify its origin.

Mexico less risky

At GM, this strategy primarily targets vehicles produced in North America, which represents the bulk of its global production. The group prefers suppliers based in the region, while remaining open to other countries outside China. While the standoff between the Trump administration and Canada continues, tensions appear to have eased with Mexico, the North American hub for several equipment manufacturers. GM is also wary of countries such as Russia and Venezuela, which are subject to US restrictions for national security reasons: however, China remains the main issue.

The manufacturer had already begun a partial decoupling, particularly for batteries and chips. It has partnered with an American rare earths company and invested in a lithium mine in Nevada. Now, the effort is expanding to more common components. CEO Mary Barra reaffirmed in October that GM is seeking to produce locally as much as possible. Its global purchasing manager, Shilpan Amin, emphasized that cost is no longer the sole factor guiding choices: "Resilience is paramount."

From "Just in Time" adjusted over 30 years to unraveling

For subcontractors, leaving China is a logistical and financial challenge. In certain key sectors such as electronics, lighting, and industrial molds, supply is largely dominated by China. "It's a huge undertaking," says an executive at a major equipment manufacturer. Collin Shaw, president of the MEMA association, points out that these dependencies have been built up over decades: "We are trying to undo in a few years what took 20 or 30 years to build. It won't happen overnight."

After a turbulent 2020, equipment manufacturers have recovered this year, following the sharp downturn caused by "reciprocal tariffs" at the end of March.

Automotive equipment manufacturers generally have a strong presence in China, even though most of them have fairly dense global networks. In the case of Valeo, China ranks first in terms of number of employees per country (14,507 out of a total of 95,254), ahead of Mexico (12,925) and France (10,854), which gives an idea of the importance of this location. The situation is the same at Forvia, which employs 24,670 of its 121,852 employees in China, ahead of Mexico (20,612) and Germany (11,951). Canada's Magna, a major supplier to the US automotive industry, employs 30,000 of its 170,000 employees in China, 27,750 in Mexico and 26,000 in the United States.