A recent editorial in the Wall Street Journal argued that auto-heavy Michigan could face economic setbacks due to tariffs on imports from Canada and Mexico, which Donald Trump has once again threatened to impose. Citing studies, the editorial noted potential cost increases for building vehicles, emphasizing that all Michigan-assembled cars and trucks use parts imported from these countries.
Trump dismissed these concerns, asserting on Truth Social that the tariffs would attract significant auto manufacturing to Michigan, a state he claimed to have won easily in the presidential election. He further claimed, without evidence, that tariffs have already deterred new auto plants from being established abroad, labeling it a significant victory for Michigan and the entire U.S.
Historically, North American automakers have leveraged free-trade agreements among the U.S., Canada, and Mexico to treat the region as a single market, enabling seamless movement of parts and vehicles across borders. Despite Trump’s tariff threats, no automaker has formally altered plans to build plants in Canada or Mexico, although Tesla, led by Trump’s ally Elon Musk, has yet to advance its previously announced plant in Mexico.
Moreover, production has not shifted back to Michigan. Stellantis has announced plans to resume operations at a shuttered plant in Belvidere, Illinois, as part of a labor agreement with the United Auto Workers union under the Biden administration, independent of Trump’s tariff rhetoric.
General Motors CFO Paul Jacobson indicated that prolonged tariffs could compel GM and other automakers to reassess their North American manufacturing strategies. However, he emphasized that any such decision would require careful deliberation. Jacobson mentioned that while market reactions anticipate significant impacts from tariffs, companies must consider the implications of hefty capital investments that could be affected by policy reversals.
Trump’s relationship with the Wall Street Journal editorial team has been contentious regarding tariffs. In a previous interaction, following a critical editorial, Trump joked about discussing the matter with Rupert Murdoch, the principal shareholder of the Journal’s parent company, affirming his belief in his perspective over theirs.
The ongoing dispute between Trump and the Wall Street Journal reflects broader debates over tariff policy and its impact, particularly on the automotive industry in Michigan. As discussions continue, stakeholders remain divided on the potential benefits and drawbacks of such economic measures.
