Stellantis Leader Rejects Trump's Tariffs and Proposes an Alternative Approach | Carscoops

      John Elkann indicated that closing a loophole permitting 4 million foreign-made cars into the US could enhance American jobs and investments.

      Stellantis' chairman is joining the increasing opposition to the proposed tariffs on vehicles from Mexico and Canada. He suggests that instead of imposing tariffs on imports, the focus should be on cars that lack US-made components.

      The company might suffer substantial repercussions from tariffs due to heavy imports from both northern and southern neighbors.

      Although President Donald Trump’s forthcoming tariffs are promoted as a way to support the US auto industry, domestic manufacturers have expressed their reservations. Stellantis, the parent company of Jeep, Dodge, and Ram, is the latest to join the conversation, with chairman John Elkann pointing out what he perceives as a loophole.

      The Trump administration intends to impose a 25 percent tax on cars imported from Mexico and Canada, with the tariffs now scheduled to start on March 4, despite earlier statements suggesting a postponement until April 2. However, since many US brands depend on lower production costs in these countries, this plan could considerably raise the base price of certain models.

      Instead of Tariffs, Just Close The Loophole

      Elkann proposes a different approach to safeguard the US auto industry that does not involve tariffs on foreign-made vehicles. He advocates for targeting cars that consist of no US-made parts at all.

      According to Elkann, there is “the real opportunity” for the administration to enhance US jobs and investment by closing the “loophole” that allows 4 million cars not meeting this criterion into the country each year. His remarks were shared during an earnings call with analysts on Wednesday, as reported by Bloomberg.

      He argues that cars produced in North America, including Mexico and China, comply with a parts-content requirement established during Trump’s first term as part of a 2020 trade deal. These vehicles should be exempt from the upcoming tariffs, which could lead to billions in additional costs for US automakers while endangering sales and jobs.

      A Growing Call From US Automakers

      As the Trump administration prepares to implement the 25 percent tariff in just over a month, the calls from concerned automakers for a reassessment of this decision seem to be increasing. Previously, Ford’s CEO, Jim Farley, remarked that the tariffs had created “a lot of costs and a lot of chaos.”

      Last year, around 2.19 million light vehicles manufactured in Mexico were exported to the US, representing 13.6% of the market, while Canadian imports accounted for 717,000 units, or 4.5 percent. Currently, the tariffs could impact Stellantis significantly, as over 40% of its vehicles sold in the US are sourced from Mexico and Canada.