As of this writing, Stellantis—Jeep’s parent company—is facing existential financial turmoil of its own. These struggles are almost exclusively due to tariffs placed on imported vehicles and auto parts. Former President Donald Trump’s administration started most of these tariffs, which use a 25% tariff on vehicles imported to the United States. According to Stellantis, this would lead it to lose almost $350 million in just the first half of 2025.
I am happy to report that these tariffs never went into effect, thanks to several crucial factors. The White House cheered this decision to help prop up domestic car makers and protect an industry seen as vital to U.S. national security. The impact on Stellantis has been severe, leading the company to temporarily halt production at two of its plants: one in Windsor, Canada, and another in Toluca, Mexico.
Stellantis will be in a steep uphill battle as it contends with rising costs tied to its cumbersome supply chain. The company laid off 900 employees across various facilities in Michigan and Indiana earlier this year, reflecting its efforts to adapt to challenging market conditions. Sales in North America tumbled 25% over a three-month period that ended in June, adding to the loss.
In a recent press release, the company announced its early earnings figures. They called out the tariff policy by name, shining a light on its pivotal influence in their present nightmare. Stellantis is working to counteract the harm by increasing available production and pulling down inventory in the U.S. They are busting their hump to restore good will among car dealers that they previously alienated.
Stellantis projects it may incur up to $2.7 billion in the first half of 2025. These losses would come from direct tariff payments and costly measures to increase profitability. Tired from non-stop preparations, CEO Antonio Filosa nevertheless took time to underscore his company’s quest for excellence, saying,
“Mediocrity is not worth the trip.” – Antonio Filosa (via LinkedIn post, attributed to previous CEO Sergio Marchionne)
Filosa and the Stellantis team continue to chase opportunities to live up to their motto. They things like carefully, artfully avoid the minutiae that’s created the made the tariff regime so confusing.
As Stellantis grapples with these financial hurdles, the broader implications of auto tariffs become increasingly apparent, raising questions about their effectiveness in genuinely strengthening the U.S. automotive sector as claimed by the White House.
