Stellantis, the giant automaker, is abandoning plans to reopen a factory in Canada and is shifting production to the United States, a move that deals a blow to a key Canadian industry and reflects the fallout from President Trump’s tariff policy.
The decision is part of a $13 billion, four-year investment announced by Stellantis on Tuesday to significantly ramp up production in the United States.
Antonio Filosa, Stellantis’s chief executive, said the plans follow “very productive talks with the Trump administration” and described the deal as the largest investment in the company’s 100-year history in the United States.
Stellantis had been planning to produce its Jeep Compass vehicle at a plant in Brampton, Ontario, west of Toronto. The company closed the factory in 2023 and laid off its roughly 3,000 workers as it retooled the facility, but now the fate of those employees is unclear.
Stellantis, which owns more than a dozen brands, said it would instead make the vehicle at a plant in Illinois that had also been idle since 2023, creating 5,000 new jobs.
Mr. Trump, who has imposed 25 percent tariffs on Canadian autos, has said he wants to move vehicle production back to the United States to help revive manufacturing and provide more jobs for Americans.
The tariffs he applied would likely make it too expensive to produce cars in Canada, Mr. Trump said during a meeting in May with Prime Minister Mark Carney of Canada. “We don’t really want cars from Canada.”
Stellantis’s decision underscores the challenge Canada faces because — unlike other countries — it has been unable to negotiate a trade deal with the Trump administration and tariffs can inflict heavy damage on an economy that dependent on exports to the United States.
Mr. Carney said the move by Stellantis was “a direct consequence of current U.S. tariffs.’’ He said his government was “focused on what we can control,” pointing to recent economic relief strategies, including a 5 billion Canadian dollar, or $3.6 billion, emergency fund for industries hardest hit by tariffs.
Canadian officials have tried to make the case to U.S. officials that the auto industries in both countries are deeply integrated, with parts moving back and forth across the border multiple times as part of the assembly of vehicles.
“Canadian auto jobs are being sacrificed on the Trump altar,” Lana Payne, the president of Unifor, the union that represents autoworkers, said in a statement.
In 2022, the federal and Ontario governments allocated 1 billion Canadian dollars, or $712 million, to help Stellantis upgrade its plants, including its Brampton facility.
Doug Ford, the premier of Ontario, who has become one of Canada’s staunchest defenders against Mr. Trump, said his government has not released any financing to Stellantis for the Brampton plant.
“Stellantis has a duty to live up to their promise to Brampton autoworkers,” Mr. Ford said in a statement.
After the Brampton factory shut down in 2023, Stellantis officials at the time promised that it would reopen and the company would fulfill its commitments to the community.
Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, a trade group, accused Stellantis of bending to Mr. Trump’s will.
It is imperative for Canada, Mr. Volpe said, to respond to the company’s decision and “to hold them accountable, to get a new product in that plant, to not let them off the hook and feel bad for them because they got bullied by the White House.”
Vjosa Isai is a reporter and researcher for The Times based in Toronto, where she covers news from across Canada.
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