According to media reports, on February 26, Stellantis Chairman John Elkann stated during a call with analysts that the Trump administration should avoid imposing a 25% import tariff on products from Mexico and Canada. Instead, he suggested that tariffs should target imported cars that do not contain any U.S. components.
Stellantis argues that Trump's tariff policy would severely impact automakers like Stellantis, which manufacture most of their vehicles in the United States. Elkann emphasized, "If the Trump administration truly wants to create American jobs, boost manufacturing, and attract investment, the real opportunity lies in closing the current tariff loophole, which allows approximately 4 million imported vehicles without any U.S. parts to enter the country each year." He added that products manufactured in Mexico and Canada should "continue to enjoy zero tariffs."
Elkann further stated, "The United States-Mexico-Canada Agreement (USMCA), signed during Trump's first term, is very clear in ensuring that vehicles produced in Canada and Mexico contain U.S.-made components. We believe these products should continue to be tariff-free." The USMCA, signed in 2020 by Trump and the leaders of Canada and Mexico, replaced the previous North American Free Trade Agreement (NAFTA).
Beyond Elkann, other Detroit-based auto industry executives have also been lobbying, both publicly and privately, for the U.S. to impose tariffs on automakers exporting vehicles from Asia or Europe rather than those with established manufacturing bases in North America.
Ford CEO Jim Farley recently echoed similar concerns, stating that tariffs on Canadian and Mexican products would be a "big win for our foreign competitors" and urged Trump to adopt a more comprehensive tariff strategy.
Elkann's strong opposition to U.S. tariffs on Canada and Mexico is not unfounded. A Barclays report from November last year indicated that Stellantis would be one of the most affected companies if the U.S. imposed a 25% tariff on goods imported from Canada and Mexico. Stellantis currently produces 39% of its North American vehicles in Mexico or Canada, compared to 36% for General Motors and 18% for Ford. Stellantis manufactures Ram heavy-duty pickups, Ram ProMaster vans, Jeep Compass, and the electric Jeep Wagoneer S in Mexico, while its Canadian facilities produce Chrysler Pacifica minivans and the electric Dodge Charger Daytona.
Regarding tariff mitigation strategies, General Motors executives revealed that before any tariffs take effect, they are accelerating efforts to shift more inventory into the U.S. while also evaluating other cost-reduction measures. GM CFO Paul Jacobson told analysts in February, "If these tariffs become permanent, we will have to take a comprehensive approach, considering everything from plant layouts to potential factory relocations."
