Stellantis Reshuffles North American Production to Sidestep U.S. Tariffs

Facing a wave of new U.S. auto tariffs, Stellantis is taking aggressive steps to restructure its North American operations—shifting pickup truck production from Mexico to Michigan and ramping up efforts to source more parts from within the United States. The move aims to dodge the financial blow of President Donald Trump’s latest trade measures, which place a 25% tariff on imported vehicles and auto components not meeting updated content thresholds.

The production shift was confirmed by Stellantis Chief Financial Officer (CFO) Doug Ostermann during a recent call with analysts. Ostermann said the Netherlands-based automaker is “calibrating” its investments, footprint, and employment across North America to maintain profitability under the new policy.

“As the situation evolves, we’ll need to calibrate our North American investments, footprint and employment to ensure the profitability of our company,” Ostermann said, emphasizing that changes are already underway, though exact timelines were not disclosed.

The updated tariff framework—announced by President Trump—offers a temporary rebate to automakers based on the percentage of their vehicles’ content that meets the U.S.-Mexico-Canada Agreement (USMCA) rules. Stellantis vehicles built in the U.S. currently average around 80% USMCA-compliant content. By raising that figure to 85%, Stellantis could secure rebates in the first two years of the policy, which would help offset the 25% levies on the remaining 15%.

Ostermann was candid: “Some suppliers who may have excess capacity in the United States may be able to switch relatively quickly, and other suppliers will take much longer. So there’s a whole range there of timelines, but we have some clear strategies that can improve the situation.”

Those strategies include halting the import of certain models, idling select Mexican assembly lines, and delaying retooling efforts at Stellantis’ idled Brampton Assembly Plant in Ontario. Production of key vehicles like the Chrysler Pacifica, Chrysler Voyager, and Dodge Charger has also been paused at the Windsor Assembly Plant due to mounting uncertainty.

While Stellantis is actively repositioning itself, the fallout has drawn harsh criticism from Canadian labor leaders. Lana Payne, President of Unifor, blasted the U.S. tariff changes in a statement to The Globe and Mail, calling them a “convoluted tariff offset scheme designed to shield U.S. plants while continuing to treat Canada as a trade enemy.” Payne argued that the rules unfairly punish Canadian-made components installed in Canadian factories—even though the same parts are tariff-free when shipped to the U.S. for final assembly.

“This is a deliberate strategy by the U.S. to siphon investment out of Canada and steal our jobs,” she added, noting the long-term damage such policy shifts could inflict on Canada’s deeply integrated auto sector.

With billions of dollars in vehicle production and supply chain logistics at stake, Stellantis’ swift action underscores just how much Trump’s tariff moves are reshaping the North American auto industry. For Stellantis, the game plan is clear: bring more production to the U.S., protect its margins, and keep vehicles moving without getting bogged down by border fees.

Source: The Globe and Mail