Stellantis Faces Tough Road Ahead With New Tariffs

Stellantis is warning its U.S. dealers that the new 25% tariffs on products from Mexico and Canada will put the automaker at a serious disadvantage compared to its Asian and European competitors. This warning comes as the Trump administration pushes forward with aggressive trade policies aimed at reshaping international commerce.

“These tariffs will put Stellantis’ flagship Chrysler, Dodge, Jeep®, and Ram (CDJR) brands at a competitive disadvantage versus Korean, Japanese, and European importers, which are not facing similar tariffs at this time,” Stellantis stated in an email to its retailers.

The impact of these tariffs is already raising alarms across the industry. Dave Kelleher, who owns David CDJR in Glen Mills, Pennsylvania, highlighted the immediate effect on pricing. “A customer recently ordered an $80,000 Ram pickup, built in Mexico. A 25% tariff would increase that to $100,000,” Kelleher said. “I lose the sale. The customer’s not going to pay that. Those pre-tariff cars become significantly more valuable.”

The broader economic implications are equally concerning. Billions of dollars in vehicles, components, and aftersales parts cross the U.S., Canada, and Mexico borders every year, and these tariffs threaten to disrupt that flow. Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation, and Trade, warned of the potential for production stoppages. “I don’t think there’s going to be any cars made in a few weeks, to be quite blunt,” Fedeli said. “We don’t want to cut you off from critical minerals and electricity. We want you to buy more from us.”

The auto supply chain is also feeling the pressure. Christophe Perillat, CEO of French supplier Valeo SE, noted that manufacturers will have to pass the costs along. “Any change will have to be compensated,” Perillat said. “Suppliers cannot absorb or even share the burden of tariffs.”

Stephanie Brinley, Associate Director of Auto Intelligence at S&P Global, described the situation as one of the most unpredictable the North American auto industry has faced. “We’ve got a little bit of a buffer, but it’s not a big buffer,” Brinley said. With vehicle inventory already tight, the risk of rising prices and declining availability looms large.

Despite the concerns, President Donald Trump remains confident in his approach. “If you don’t make your product in America, however, under the Trump administration, you will pay a tariff, and in some cases, a rather large one,” Trump said during a televised address. He added, “Other countries have used tariffs against us for decades, and now it’s our turn.”

As Stellantis works to navigate these challenges, the potential for higher vehicle prices, disrupted production, and strained supply chains could shape the automaker’s future — and the broader automotive industry — for months to come.

Source: The Detroit News