ohn Elkann made these statements just hours before Trump told reporters that tariffs on Canada and Mexico will go into effect on April 2. John Elkann, current CEO of Stellantis-in the meantime that Tavares’ next replacement is chosen-has recently expressed a clear position regarding the U.S. duty policy. At a pivotal moment, just hours after the Trump administration’s announcement that tariffs on Canada and Mexico would take effect on April 2, Elkann proposed an alternative, targeted approach.
Elkann statement on Trump’s duties
Elkann suggests that the Trump administration should focus on imposing tariffs on imported vehicles that do not include components made in the United States. This strategy, he believes, would be more effective in supporting American jobs and investment than raising tariffs on cars made in Mexico and Canada.
During a conference call on Stellantis earnings, Elkann highlighted a “loophole” that allows the importation into the United States of about 4 million vehicles without U.S. components. This situation, according to Elkann, poses a significant challenge to the U.S. auto industry and requires targeted action.
Jim Farley raises alarm
The introduction of new tariffs on automotive imports is generating heated debate in the United States, with Ford CEO Jim Farley recently sounding the alarm about the potential devastating consequences for the domestic industry.
According to Farley, the imposition of such tariffs would create a real “hole” in the U.S. auto industry, threatening the competitiveness of local manufacturers. Increased production costs resulting from duties on imported components would make U.S. vehicles less affordable in the domestic and international markets.
Farley also pointed out that these duties would be a “boon” to Asian and European rivals, who could continue to import their vehicles into the United States without suffering the same restrictions. This competitive imbalance would threaten the survival of many American companies and the loss of thousands of jobs.
Automotive industry representatives strongly argue that vehicles produced in North America, in accordance with the party-sharing requirements established by the USMCA (the evolution of NAFTA), should be exempt from these new tariffs. The USMCA was designed to promote regional trade and support local production, and the imposition of duties would contradict these goals.
The concerns expressed by Farley reflect a widespread fear in the U.S. auto industry. Rising costs, loss of competitiveness and the threat of offshoring are just some of the potential negative consequences of the new duties.
The duties could significantly affect U.S. consumers
In addition to the impact on manufacturers, tariffs could have significant repercussions on American consumers. Higher prices for new and used vehicles, reduced choice, and a potential decrease in quality are just some of the effects that could weigh on people’s pockets.
In an increasingly competitive global economy, it is critical that policymakers carefully consider the implications of any decisions that might affect the automotive industry. The goal should be to support local production, promote competitiveness and ensure a fair market for all stakeholders.