Geomagnetically induced current (GIC) causes the transformer core saturation, which increases the magnitudes of harmonic components in the transformer currents. In such a condition, the transformer differential protection can fail to trip and clear internal short-circuit faults, due to harmonic blocking (HB). This paper compares the performance of existing HB methods, employed in the transformer differential relays, during the occurrence of internal faults and under the GIC flow in the transformer. The time-domain simulations, conducted for bolted and unbolted faults under loaded and unloaded transformer conditions, show that there are GIC-based scenarios in which common and independent HB methods cause the differential protection failure to trip the transformer.