By Mike Colias
DETROIT (Reuters) -General Motors has ordered several thousand of its suppliers to clear 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 that 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 deadline of 2027 for some suppliers to dissolve their sourcing ties with China, some of the sources said.
GM approached some suppliers with “the directive by the end of 2024, but the effort took on new urgency last spring, during the early days of a growing trade battle between the United States and China, sources said. GM executives have said it is part of a broader strategy to improve the “resilience” of the company’s supply chain, the sources said.
Geopolitical tensions between the two superpowers have left auto executives in selection mode throughout 2025. U.S. President Donald Trump’s on-again, off-again tariffs and industry panic attacks over potential rare earth bottlenecks and computer chip shortages have auto companies reconsidering their ties to China, long a major 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 factory work in the United States. But industry executives say they also sense a long-term, bipartisan shift in U.S.-China relations, and some are taking steps to undo ties with China that have been decades in the making.
GM’s effort targets parts and materials used in cars made in North America, where the company makes most of its vehicles globally. GM prefers to “source parts from North American factories for vehicles made in the region, but is open to supply lines outside of China outside the United States,” the sources said.
GM’s directive includes several other countries that, like China, are subject to U.S. trade restrictions due to national security concerns, such as Russia and Venezuela. China is by far the largest source of auto parts on the list.
The automaker had already been among the most active auto companies in weaning itself off China for battery materials and computer chips. It has partnered with a US-based rare earths company and invested in a lithium mine in Nevada for future materials for electric vehicle batteries, for example. But the latest effort is broader and includes more basic components and materials.
A GM spokesman declined to comment on the company’s conversations with its supplier base. GM CEO Mary Barra outlined efforts to move more of the company’s supply chain to the US.
“We’ve been working for a few years to have supply chain resilience,” Barra said during GM’s quarterly conference call in October, adding that “the automaker tries to source parts in the same country where it makes 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 stop simply turning to lower-cost countries.
“Resiliency is important – making sure you have more control over your supply chain and knowing exactly what is coming from where,” he said.
AUTO MANUFACTURERS WORRY ABOUT TARIFFS AND PARTS SHORTAGES
The United States and China agreed to reduce a series of tariffs and export barriers following a late October meeting between Trump and Chinese President Xi Jinping. Still, auto executives have grown tired of the volatile trade dynamics between countries and the consequences on their supply chains, in an industry where product planning cycles span many years.
Parts suppliers and automakers had already been shifting their supply chains away from China to avoid tariffs imposed during Trump’s first term. This year, a barrage of tariffs from China unleashed shortly after Trump took office triggered a series of counterattacks by China.
In April, China clamped down on exports of parts containing rare earth elements that are widely used in car interiors, sending auto companies scrambling to stockpile components. In October, China added restrictions on shipments of more rare earth elements.
Concerns about potential factory disruptions flared up 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 used in automotive electronics around the world. The move sparked industry warnings of widespread factory disruptions.
REWIRING SUPPLY CHAINS CAN TAKE YEARS
For parts suppliers, diverting supply chains away from 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 difficult to find alternatives, supplier executives say.
“It’s a big effort. Suppliers are fighting,” an executive at a large parts maker said of GM’s initiative.
Collin Shaw, director of MEMA, the Vehicle Suppliers Association, said auto companies and large suppliers have been working to “de-risk” their supply chains by cutting content from China and some other countries. But the network of parts and raw materials within China is deeply entrenched, 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 quickly.”
(Reporting by Mike Colias in Detroit; Editing by Brian Thevenot and Matthew Lewis)
