Automaker Stellantis NV (NYSE: STLA) will relocate some of its manufacturing from Mexico to the United States as part of a strategy to mitigate the impact of tariffs recently imposed by the Trump administration, the company announced on Wednesday.
During an analyst conference call, Chief Financial Officer Doug Ostermann revealed plans to transfer certain pickup truck assembly operations to Michigan facilities. The automaker is also engaging with component suppliers regarding the possible relocation of parts production to US sites to enhance domestic content in its vehicles.
The announcement came just 24 hours after President Trump modified his tariff policy, implementing a 25% duty on imported vehicles and automotive components.
Mercedes-Benz executives noted that market volatility created by these trade measures makes financial forecasting extremely difficult. The German luxury manufacturer warned about potential negative effects on profitability should current trade barriers remain in place.
The revised policy offers US manufacturers tariff rebates calculated on their compliance with US-Mexico-Canada Agreement requirements. Companies can claim 3.75% of their US production’s retail value in the first year and 2.5% in the second year.
In response to the uncertain trade environment, Stellantis has already suspended production of Chrysler minivans and Dodge Chargers at its Windsor facility and postponed planned retooling work at its Brampton plant, both in Ontario.
According to Ostermann, approximately 80% of the content in Stellantis vehicles manufactured in the US already meets USMCA standards. Raising this to 85% would allow first-year rebates to offset tariffs on remaining imported components.
“We’re very, very active in working on that,” Ostermann stated during the call. “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.”
The Stellantis executive described Trump’s policy adjustments as a positive development, noting ongoing discussions about increasing US-sourced components.
Automotive industry representatives have consistently opposed the tariffs, citing concerns about price inflation, sales declines, and workforce reductions. Rebuilding manufacturing infrastructure typically requires multi-billion-dollar investments, according to sector analysts.
Stellantis withdrew its full-year financial outlook, joining General Motors (NYSE: GM), Volvo (STO: VOLV-B), and Mercedes-Benz (ETR: MBG) in citing uncertainty caused by the tariffs.
Information for this story was found via The Globe and Mail, Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
The Grocery Grift: Why Toronto and New York Are About to Light Taxpayer Money on Fire