- Stellantis’ John Elkann joins growing opposition to the proposed tariffs on Mexican and Canadian cars.
- The chairman proposes targeting cars without US-made content instead of imposing tariffs on imports.
- The company could face severe consequences from tariffs due to significant imports from north and south.
Despite President Donald Trump’s incoming tariffs being touted as a means to protect the US auto industry, homegrown manufacturers have voiced concerns. The latest to throw their hat into the ring is Stellantis, the parent company of Jeep, Dodge, and Ram, with chairman John Elkann highlighting what he believes is a loophole.
President Trump’s administration plans to impose a 25 percent tax on cars imported from Mexico and Canada, with the tariffs now set to take effect next week on March 4, even though he had previously said they would be delayed until April 2. However, with many US brands relying on lower production costs across the border, this plan could significantly increase the base cost of some models.
Instead Of Tariffs, Just Close The Loophole
Elkann has a different plan to help protect the US auto industry, and it doesn’t involve enforcing tariffs on cars made abroad. Instead, the Stellantis boss wants to target cars that don’t have any US-made parts in them.
Read: Trump Plans 25% Tariffs On Cars And Chips On April 2
“The real opportunity” for the administration to boost US jobs and investment is, according to Elkann, closing the “loophole” that allows 4 million cars that don’t conform to that criteria annually into the country. Bloomberg reports that these comments were made on an earnings call with analysts on Wednesday.
His argument is that cars manufactured in North America, including Mexico and China, adhere to a parts-content requirement negotiated during President Trump’s first term as part of a 2020 trade agreement. These cars should be exempt from the incoming tariffs, which threaten to add billions in costs to US automakers while also putting sales and jobs in jeopardy.
A Growing Call From US Automakers
With the Trump administration planning to implement the 25 percent tariff in just over a month, the call from worried automakers to reassess the move appears to be growing louder. Earlier, Ford’s CEO, Jim Farley, claimed that the tariffs had introduced “a lot of costs and a lot of chaos.”
Approximately 2.19 million light vehicles built in Mexico were exported to the US last year, accounting for 13.6% of the market. Canadian imports made up 717,000 units, or 4.5 percent. Right now, the tariffs could hit Stellantis hard, since more than 40% of its cars sold in the US are coming from Mexico and Canada.
