GM to phase out Chinese-sourced parts by 2027 amid geopolitical shift

General Motors has mandated its suppliers to eliminate Chinese parts from supply chains by 2027, signalling a strategic move to enhance resilience amid escalating trade tensions and geopolitical risks.

General Motors (GM) has issued a sweeping directive to thousands of its suppliers to cut Chinese-sourced parts and materials from their supply chains by 2027, a clear signal of the company’s strategic shift to insulate itself from escalating geopolitical risks and t...

rade volatility. This move primarily targets vehicles built in North America, where GM manufactures most of its cars, but also includes supply chains linked to countries under U.S. trade restrictions like Russia and Venezuela.

According to Reuters, this initiative, which began gaining urgency in early 2025 amidst rising U.S.-China trade tensions, reflects GM’s growing prioritisation of supply chain resiliency. The deadline is intended to minimise the vulnerability of GM’s operations to tariffs, export restrictions, and potential bottlenecks in critical materials such as rare-earth elements. These issues have already manifested in recent restrictions by China on exports of rare-earth elements essential for vehicle manufacturing, and related disruptions in semiconductor supply chains, which are vital for car electronics.

GM’s directive encompasses a wide range of components including lighting, electronics, wiring, and raw materials , areas historically reliant on Chinese sourcing for decades. Industry insiders note the challenge of urgently unwinding these long-established supply chain relationships, describing the process as both complex and costly. Some suppliers have reportedly scrambled to identify alternative sources capable of meeting GM’s specifications within the tight timeframe.

The automaker’s pivot away from China is part of a broader strategy to enhance supply chain resilience by sourcing more parts locally or regionally. GM CEO Mary Barra has emphasised a preference for procuring parts in the same countries where the vehicles are manufactured when feasible, reflecting a shift towards nearshoring. Recent data on GM’s 2025 Chevy Equinox EV and Blazer EV models illustrate this trend: the proportion of Chinese-sourced parts in these vehicles plummeted from 18% in 2024 to an almost negligible number, replaced largely by components sourced from Mexico and South Korea.

This realignment extends beyond China. GM is urging suppliers to also divest from sourcing in Russia and Venezuela, a move consistent with U.S. trade policies targeting these regions. The plan to reconfigure supply chains not only aims to mitigate risks posed by geopolitics but also to smooth production schedules and pricing volatility that can arise from sudden trade disruptions.

However, analysts warn that this sweeping supply chain overhaul could have ripple effects across the global automotive industry for years. The reliance on Chinese manufacturing is deeply entrenched, and rebuilding complex supply networks in other parts of the world will likely increase costs and prolong lead times. The degree to which other automakers follow GM’s lead remains to be seen, but the company’s actions underscore a significant trend towards decoupling from Chinese manufacturing influence in critical industries amid ongoing geopolitical tensions.

In sum, General Motors’ directive to phase out Chinese-sourced parts by 2027 highlights the intricate balancing act faced by global manufacturers today: managing cost and complexity while responding to an increasingly fragmented and politically charged trade environment. The coming years will be pivotal in defining the resilience of automotive supply chains and the future shape of global trade dependencies.

Source: Noah Wire Services