Today, US tariffs of 25% on vehicles imported from Mexico and Canada have taken effect: these tariffs would eliminate €5.88 billion in earnings from Stellantis and Volkswagen, according to Bloomberg. Indeed, both manufacturers have factories in Mexico and export to the United States. The Euro-American Group (owner of the Jeep, Ram, Chrysler, and Dodge brands) could import approximately 417,000 vehicles into the United States this year from these two countries, meaning the economic damage will be substantial.
Stellantis could be heavily impacted by US tariffs on Mexico and Canada
Assuming the US does not introduce mitigation measures, it is predicted that €3.44 billion of Stellantis‘ earnings and €1.77 billion of Volkswagen’s earnings are at risk. It remains to be seen whether a fruitful dialogue can develop between Trump and the two auto groups.
There is limited room to transfer this additional cost to buyers amid increasing price discounts in the United States, which average around $2,000. The unlikely scenario of the entire tax being passed on to buyers would result in price increases of $6,000-$10,000.
Stellantis led European automakers’ stocks down in trading, with its Milan-listed shares falling by more than 6% to their lowest since December 2. Volkswagen’s preferred shares dropped by over 4% in Frankfurt, but BMW AG and Mercedes-Benz Group AG were also affected. In the future, from April 2, 2025, US anti-EU tariffs on cars could also take effect, but that’s another matter entirely, yet to be determined in the coming weeks.