Stellantis Gets Squeezed at the Border

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Stellantis just got another North America headache.

Trump's Canada tariff threat dragged down Ford and GM too, but Stellantis looks especially exposed because its Canadian factory footprint is already complicated, underused and politically sensitive.

President Donald Trump threatened to raise tariffs on Canadian cars, trucks, auto parts and steel to 50% from January 1, 2027, after US-Canada trade talks collapsed.

The market did not wait for the fine print. Stellantis shares fell roughly 3% in Paris and U.S.-linked trading, while Ford and General Motors also dropped as investors priced in higher costs for North American supply chains. US steelmakers moved the other way, with Cleveland-Cliffs, Nucor and Steel Dynamics rallying on the prospect that tariffs on Canadian steel could support domestic pricing.

For Stellantis, the headline landed at a delicate moment.

The company has been trying to rebuild investor confidence after a bruising stretch. Its latest quarter showed signs of progress, with net revenue of €43.5 billion (about $51 billion), up 13%, and North American revenue up 32%. Net profit returned to €0.3 billion, adjusted operating income reached €0.8 billion, and industrial free cash flow improved to €1.0 billion.

But the tariff cloud is not small. Stellantis expects a 2026 tariff headwind of €1.0 billion to €1.2 billion, which is bigger than its latest quarterly adjusted operating income.

The Canada angle is especially awkward. Stellantis still builds the Chrysler Pacifica and Dodge Charger at Windsor, where a third shift has lifted employment close to 6,000 workers. But Brampton remains idle after the future Jeep Compass program was moved to Belvidere, Illinois.

Unifor says Stellantis has considered closing or selling Brampton, though the company has not announced a final decision. Earlier hopes that the plant might assemble Leapmotor electric vehicles have not yet turned into a confirmed program.

The tariff negotiations had reportedly included a possible reduction in Canadian-built vehicle duties from 25% to 15%, but the US and Canada failed to agree on how much regional content should qualify. Washington wanted more weight on US-made parts. Ottawa wanted recognition of the broader Canada-US-Mexico supply chain.

Canada is preparing countermeasures from September 8 across sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. Autos are not on the initial retaliation list, but the failure to reach a deal leaves Stellantis' Canadian production exposed.