In response to the recently imposed 25% tariffs on cars by President Donald Trump, the car manufacturer Stellantis shut down two important assembly plants in North America, in Canada and Mexico. This is the most significant reaction to the new tariffs that went into effect on April 2, 2025, which targets vehicles imported into the U.S. from everywhere in the world, even from its closest trade partners Canada and Mexico.
Beginning April 7, Stellantis will stop production in its Windsor Assembly Plant, Ontario, for two weeks, while no production will take place in the Toluca Assembly Plant, Mexico, for the entire month of April. This decision affects thousands of employees, leading to widespread concern about how this economic shock will ripple throughout the economy.
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The impact: Approximately 6,000 employees
This is an immediate and widespread effect. In the U.S., Stellantis stated that about 900 union-represented workers who provide support to the plants through powertrain and stamping operations will be temporarily laid off. In Canada, 4,500 hourly workers in the Windsor plant have also been laid off. Mexican workers at the Toluca plant will go to work under the force of contract but are idled from production.
In an email to employees companywide, Antonio Filosa, North American Chief at Stellantis, wrote that these layoffs were implemented as a direct instrument of the tariffs. “We are continuing to assess the medium- and long-term effects of these tariffs,” Filosa wrote, “but have decided to take some immediate actions.”
Other automakers act differently
Stellantis is now living the most drastic step, while those automakers racked up in Detroit came up with their alternative strategies. General Motors has been increasing production of its pickup trucks in the Indiana factory, apparently to beat possible supply issues and take advantage of this last flourish of pre-tariff demand. Ford is pushing a new patriotic sales campaign, with the title “From America, For America,” which includes the “employee discount to everyone until June 2.” That way, there will be sales promotion and no production cut into the effects of tariffs.
Union leaders and economists Have worries
Unifor National President Lana Payne, who represents Canadian auto workers, said the tariffs are bad and will harm workers across North America. “Trump is about to learn how interconnected the North American production system is the hard way,” Payne said. “And auto workers are paying the price for that lesson.”
Economic analysts warn that this is the beginning. The sales during the first quarter of 2025 shot up as many consumers rushed to buy before prices increased. However, demand is predicted to plummet in the coming months. Stellantis’ production brake is also planned to ease the oversupply of inventory, especially since some of its main brands have bad sales figures.
A sign of things to come?
The swiftness of Stellantis’ decision to stop operations is a cause for concern, as Trump’s tariffs quickly turn the hitherto existing cross-border scenario of the automobile industry. Such actions will not be the last for most automakers, and this may be the beginning of an avalanche of economic dislocations, layoffs, and strategic realignments that run far beyond the assembly line.
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