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Stellantis (STLA+6.37%), the automaker behind Jeep, has said it will absorb some of its suppliers’ costs from President Donald Trump’s tariffs — one of the first indicators of how the auto industry is responding to the president’s trade war.
The 25% tariff on automobile imports, which will begin within a month, is set to drastically increase the cost of cars. Stellantis, which has its headquarters in the Netherlands, makes a slew of cars, including familiar brands in the U.S. such as Jeep, Chrysler, Ram, and Maserati.
Bloomberg reported that Stellantis’ head of purchasing in North America told suppliers last week about the company’s plan to help offset tariffs, but it’s unclear how much Stellantis will contribute.
“There will be some sort of assessment of the criticality of the parts perhaps, or the ability to re-source or dual-source the parts,” Mitch Zajac, an automotive and supply-chain attorney with Butzel Long in Detroit, told Bloomberg.
And while it’s not clear if Stellantis will be helping all of its suppliers or some, Zajac said it’s early enough in the process that the company might renege on the plans.
Stellantis made news last week when it said it was pausing production at its plants in Mexico and Canada on account of the tariffs and temporarily laid off hundreds of employees at its plant in the U.S.
The company’s stock dipped 5.50% on Monday as of 3 p.m. ET despite the news of the plan. Even before the tariffs, Stellantis has struggled with sales, reporting a 12% drop for the first quarter of 2025 compared with the same frame from a year ago.