Chairman of automaker Stellantis urges Trump to keep Mexico, Canada 'tariff-free'

By Nora Eckert

DETROIT (Reuters) - Stellantis faces uncertainty around tariffs promised by U.S. President Donald Trump that could significantly reduce its profits, while the Jeep-maker is already struggling to recover from what it called a "rough" 2024.

The Franco-Italian-U.S. group argued that Trump's administration should avoid implementing tariffs that would disproportionately hit automakers that build most of their vehicles in the U.S., including the 25% duties on Mexico and Canada that are poised to go into effect in early March.

"The real opportunity for the administration in order to really boost jobs in America and manufacturing opportunities and investments is by closing the loophole that currently allows approximately four million vehicles into the country" with no U.S. content requirements, Stellantis Chairman John Elkann said Wednesday on a call with analysts, adding that products built in Mexico and Canada should "remain tariff-free."

The company earlier on Wednesday reported full-year results for 2024, and gave a cautious outlook for the year ahead as it recovers from slumping U.S. sales and searches for its next CEO.

"2024 ... is a year we are not proud of," said Elkann, who is steering the company while it is seeking a new CEO.

Detroit's auto executives have publicly and privately lobbied for tariffs directed at automakers who import vehicles from Asia or Europe into the U.S., as opposed to automakers who have anchored their production in North America.

Elkann's argument echoes one from Ford Motor CEO Jim Farley, who recently called the Canadian and Mexico tariffs "a bonanza for our import competitors," and urged Trump to implement more comprehensive tariffs.

If 25% tariffs were implemented on imports from Canada and Mexico, Elkann's company would be among the most affected. Stellantis makes 39% of its North American vehicles in Mexico or Canada, while General Motors makes 36% there and Ford Motor makes 18%, according to a November report from Barclays.

GM executives have said they are moving more inventory across borders ahead of tariffs potentially hitting and are evaluating other actions to mitigate costs on the business.

"If they become permanent, then there's a whole bunch of different things that you have to think about in terms of, where do you allocate plants, and do you move plants, etc.," GM's Chief Financial Officer Paul Jacobson told analysts in February.

(Reporting by Nora Eckert; Editing by Alexandra Hudson)