DETROIT — Glenn Stevens Jr., the executive director of MichAuto, is acutely aware of the intricate ties between the automotive industries of Michigan and Canada as he looks out from his office window in downtown Detroit, where he can see Canada across the river. He emphasizes the seamless integration of the economies related to automobiles in Ontario and Michigan, stating, “We don’t even view there being a border, there’s literally a couple of bridges.”
However, this deep connection faces potential disruption amid the recent decision by U.S. President Donald Trump to impose significant tariffs on automobile imports to the United States. On Thursday, Trump announced a 25 percent tariff on all car imports, raising concerns within the North American automobile sector, which has historically relied on a collaborative relationship between the U.S. and Canada.
A White House official confirmed that vehicles built under the Canada-U.S.-Mexico Agreement (CUSMA) would incur these tariffs until a reliable system to assess the proportion of American-made components in finished cars is established. Until that system is operational, tariffs will impact the entire vehicle's value, resulting in potential harm to Michigan's automotive industry and beyond.
Stevens Jr. expressed concern that dismantling the century-long partnership between the U.S. and Canada would not only impact local competitiveness but also weaken North America's standing against global competitors, particularly the Chinese automotive industry. “Taking it apart is not a good thing,” he warned, highlighting fears of reduced regional, national, and international competitiveness.
Detroit, known as “Motor City,” has long been the backbone of the American automobile industry, housing major players like Ford, General Motors, and Stellantis, while maintaining deep-rooted connections to Canada. Historical figures in the automotive industry, such as Henry Ford and the Dodge brothers, have straddled both sides of the border in establishing foundational automotive companies.
The integration of the automobile industries matured with the 1965 Auto Pact trade agreement, which paved the way for economic collaboration between Canada and the United States. Chris Vitale, a veteran of the auto industry who retired from Stellantis in December, views the Auto Pact as an exemplary trade agreement, contrasting it with the North American Free Trade Agreement (NAFTA), which he believes negatively affected the automobile sector by introducing competition from Mexico's lower labor costs.
Despite the potential benefits of the tariffs, such as protecting American jobs, Vitale reflects a conflicted perspective. While he appreciates the efforts to combat unfair trade practices from more adversarial nations, he wishes Canada were not caught in the crossfire. He hopes that this situation prompts negotiations to address the issues head-on without collateral damage to U.S.-Canadian relations.
The tariffs will directly affect vehicle parts crossing the Michigan-Ontario border, impacting the production of various vehicles where parts may traverse the border multiple times during assembly. The administration’s broad objective is to revive manufacturing jobs in the U.S., with some officials believing that the way to alleviate tariffs is to significantly repatriate manufacturing activities back to American soil, despite the substantial challenges that involves.
Following the tariff announcements, stock markets have experienced significant downturns, raising questions about whether the administration will maintain its course amid economic instability, all while trying to keep CUSMA supply chains intact.
The sentiment among Michigan residents regarding these tariffs is mixed. While some support Trump’s overarching trade strategy to address trade deficits, there is widespread apprehension about the potential fallout on local jobs tied to the automotive sector. For instance, Julie Soyer expressed concerns about layoffs affecting friends and family in the industry, while David Piontkowski voiced displeasure at the prospect of escalating tensions with Canada, stating, “Canada has not done anything wrong.”
These sentiments illustrate a community deeply interwoven with the automotive industry, where concerns about job security and international relations resonate strongly amid the unfolding trade tensions.
