Geomagnetically induced current (GIC) flowing through power transformers causes core saturation, leading to local hot-spot overheating, abnormal vibration, increased noise, and even irreversible transformer damage and forced outage. To prevent catastrophic GIC-induced failures, relay protection must isolate transformers in a timely and reliable manner, yet GIC has long been a critical challenge interfering with the correct operation of conventional transformer protection systems. This paper studies transformer excitation current characteristics under GIC impact, establishes a transformer model with extreme GIC injection, analyzes differential protection performance under varying GIC magnitudes, proposes a modified differential protection method, and verifies its effectiveness via simulations and experiments. Results demonstrate that GIC distorts transformer excitation current, introducing a second harmonic into differential current to trigger differential tripping blocking. The distinct second-harmonic features between magnetizing inrush and GIC injection enable reliable selective unblocking of harmonic restraint. To enable the differential protection to operate correctly under different GIC injection conditions, the operating threshold shall be adjusted according to the transformer parameters after the harmonic blocking is deactivated. The proposed strategy can potentially disable the harmonic blocker during GIC events, allowing relays to trip on demand, which is critical for ensuring transformer safety under extreme conditions.