US president-elect Donald Trump’s campaign remarks on international trade, especially NAFTA, have prompted Fiat Chrysler Automobiles (FCA) chief Sergio Marchionne to express concern over the potentially adverse impact for his company’s North American operations.
US president-elect Donald Trump’s campaign remarks on international trade, especially NAFTA, have prompted Fiat Chrysler Automobiles (FCA) chief Sergio Marchionne to express concern over the potentially adverse impact for his company’s North American operations.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Speaking to Bloomberg TV, Marchionne warned that Trump’s election “is a game changer, mainly because I think that there are a number of conditions in the U.S. which are not yet spelled out.”
He added that statements Trump has made about international trade are “a big issue” because of the North American Free Trade Agreement’s impact on Fiat’s operations in North America.
Marchionne warned earlier this year that a Trump victory could impact the carmaker’s production options in North America, depending on the way he manages NAFTA and whether he supports protectionist views. The Fiat CEO told Bloomberg he hasn’t spoken with Trump but will work with the new administration.
Trump has already said that the US will quit the Trans-Pacific Partnership (TPP) free trade deal on his first day in the White House.
During his campaign to be elected US president, Trump made a number of commitments to roll back on international free trade agreements and encourage more manufacturing and job creation in the US. He also suggested that the US could impose higher tariffs on Mexican imports to penalise companies who have put low-cost manufacturing facilities overseas. He frequently singled out Ford for making cars in Mexico and said that he would impose a 35% tariff on imports of cars from Mexico.
Bloomberg Industry analyst Kevin Tynan notes that FCA assembled about 17% of all the vehicles it made in that North America in Mexico during the first ten months, with almost all the cars sold in the US and Canada.
“The company would incur hefty costs if the Trump administration is able to enact a 35% levy on vehicles and parts imported into the US,” Tynan said.
FCA’s record Q3 profit was driven by continued strong performance in North America; NAFTA profit margin increased to 7.6%.
See also:
Trump says US will quit TPP
Ford’s Fields fires back at Trump tariff plan
What could a Trump victory mean for the automotive industry?
