Stellantis, the automaker behind Jeep, Ram and Chrysler, is considering financial assistance for suppliers to ease the burden of newly imposed U.S. tariffs on auto imports and parts.
The proposed program, which remains private and not officially confirmed by the company, would allow eligible suppliers to apply for monthly tariff payments from Stellantis to help offset costs tied to President Donald Trump’s ongoing trade war, according to a person familiar with the matter. Marlo Vitous, Stellantis’ head of North American purchasing, outlined the initiative during a recent supplier meeting in Detroit.
While the specifics remain unclear -- including what percentage of the tariff costs Stellantis might cover -- suppliers would need to meet certain qualifications to participate, the source told Transport Topics.
The move comes as the automotive industry grapples with the early impacts of a 25% tariff on U.S. automobile imports, which took effect April 3. A separate levy on imported auto parts is expected to begin no later than May 3. Analysts warn the tariffs could significantly raise production costs and disrupt global supply chains.
Stellantis has already taken action, temporarily halting production at plants in Canada and Mexico and triggering hundreds of layoffs in the U.S. It also joined other automakers in offering discounts to encourage continued vehicle sales amid mounting cost pressures.
“They’re talking, with bated breath, about being willing to support suppliers with costs associated with tariffs,” Mitch Zajac, an automotive and supply chain attorney with Butzel Long in Detroit who is advising clients on Stellantis’ proposal, told Transport Topics.
Zajac explained that suppliers must pay tariffs to U.S. Customs and Border Protection before their parts can be cleared for entry. Rather than renegotiate supplier contracts, Stellantis is considering monthly lump-sum reimbursements to eligible companies to help defray these costs.
“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,” Zajac added, cautioning that the assistance isn’t guaranteed and the framework is still in early development.
Many suppliers are financially strained after taking on debt to meet EV production targets that fell short of projections. Some are now appealing to automakers for relief, warning that absorbing the new tariffs without assistance could prove unsustainable.
As of midday April 7, Stellantis shares had fallen 6.2%, part of a widespread market decline. The company’s stock is down approximately 30% year to date.
