According to foreign media reports, on February 26, Stellantis Chairman John Elkann said in a conference call with analysts that the Trump administration should avoid imposing 25% import tariffs on Mexican and Canadian products, but instead impose tariffs on imported cars that do not contain any U.S. parts.
Stellantis Group believes that Trump’s tariff policy will seriously impact automakers that produce most of the cars in the United States like Stellantis. John Elkann also said: “If the Trump administration really wants to increase jobs in the United States, promote manufacturing and attract investment, the real opportunity lies in plugging the current tariff loophole, which allows about 4 million imported cars without any U.S. parts to enter the United States every year.” He added that products produced in Mexico and Canada should “continue to maintain zero tariffs.”
John Elkann said, “The US-Mexico-Canada Agreement (USMCA) signed by Trump during his first term is very clear to ensure that the cars we produce in Canada and Mexico contain U.S.-based parts. We believe that these products should continue to enjoy zero tariff treatment.” The US-Mexico-Canada Agreement is an agreement signed by Trump with Canadian and Mexican leaders in 2020 to replace the previous North American Free Trade Agreement.
In addition to Elkann, other automotive executives in Detroit have recently lobbyed the United States to impose tariffs on automakers exporting cars from Asia or Europe to the U.S. markets, rather than taxing automakers that have already taken their production bases in North America.
Ford Motor CEO Jim Farley recently expressed a similar view, saying the U.S. tariffs on Canadian and Mexican products are “a major benefit to our overseas competitors” and urged Trump to implement more comprehensive tariff measures.
John Elkann strongly opposes the U.S. tariff plans against Canada and Mexico, and his concerns are not groundless. Stellantis will be one of the most affected businesses if the U.S. imposes a 25% tariff on goods imported from Canada and Mexico, a Barclays report last November showed. Because 39% of Stellantis’ cars produced in North America are produced in Mexico or Canada, compared to 36% for GM and 18% for Ford. It is reported that Stellantis produces Ram heavy-duty pickup trucks, Ram ProMaster vans, Jeep Compass and electric version of Jeep Wagoneer S in Mexico, and produces Chrysler Pacifica vans and electric version of Dodge Charger Daytona in Canada.
Speaking of tariff responses, GM executives revealed that they are stepping up transferring more inventory to the U.S. before the tariffs take effect, while also evaluating other measures to reduce business costs. “If these tariffs become permanent, we have to take a comprehensive consideration from multiple aspects, such as how the factory is laid out, whether to move the factory, etc.”