Nearly 20 Percent of Michigan’s economy is directly or indirectly related to autos.
Michigan rates to be the First Victim of Trump’s Trade War
Nearly 20% of the economy is tied to the auto industry, which has become increasingly dependent on parts and vehicles from Canada, Mexico and China—imports Trump hit with steep tariffs in recent weeks. This trade has grown so large that Michigan ranks fifth in the nation by the size of its imports and exports, even though its total economy ranks 14th.
Detroit’s automotive executives have shifted into battle mode. They are stockpiling imported components, wrestling with suppliers over price increases and setting up war rooms to figure out how to cut costs.
One auto executive early last week darkly predicted “Chernobyl” if tariffs broadly hit imported parts, which they’re scheduled to do next month.
Mary Buchzeiger, CEO of Lucerne International, another local auto supplier, is also talking with customers about her need to raise prices because of the new China tariffs. About 80% of the automotive hinges, brackets and other components Lucerne sells are made in China.
“There is no way we can absorb these tariffs. I don’t have 20% margin to give,” said Buchzeiger, who owns the company, which employs 25 people.
Some forecasts for the industry are dire. Anderson Economic Group, a Michigan consulting firm, estimates the tariffs will add $2,500 to $12,000 to the price of many new cars, and up to $20,000 for luxury imports. That will push new vehicles further beyond the reach of consumers already struggling with average prices of roughly $48,000.
“This is going to have a dramatic negative effect on car sales in the United States…and there will be production shutdowns,” said Patrick Anderson, the firm’s CEO. “The epicenter for job losses due to these tariffs is somewhere between Detroit, Michigan, and Windsor, Canada.”
Gabriel Ehrlich, a University of Michigan economist, forecasts the new steel and aluminum tariffs alone will cost Michigan 600 auto manufacturing jobs by the end of next year, and an additional 1,700 jobs in industries that serve auto workers. The auto tariffs will have an even bigger impact, he said.
Tariffs also pose a threat to Michigan’s agricultural sector, which ranks among the top in the U.S. in the production of tart cherries, asparagus, and squash, and the state’s nascent tech industry, centered on the production of drones and other battery-powered vehicles.
GM, which builds many of its pickup trucks in Mexico, last month said it could offset up to 50% of tariff costs through short-term steps such as accelerating imports ahead of tariffs. If the company is ultimately forced to move more production from Mexico to the U.S., its labor costs will rise. UAW workers building GMC Sierras and Chevrolet Silverados in Fort Wayne, Ind., are paid some 10 times more an hour than workers building those same trucks at GM’s factory in Silao, Mexico, according to the union.
Jim Seavitt, a longtime car dealer in the shadow of Ford’s headquarters in Dearborn, Mich., said he’s relieved that Ford’s U.S.-heavy manufacturing base means that only a few of the company’s complete vehicles are subject to tariffs. But he worries about Trump’s plan to tariff parts next month, such as the engines that Ford produces in Canada for trucks built in the U.S.
“If it’s a V-8 engine…that’s gonna add 6% to 7% to the truck,” he said.
Hope Against Hope
The Journal also interviewed some people who took the long and wrong view.
For example, Kelly Nering, a finance professional whose father worked at Ford, said “In the long term we are protecting our interests, and we’re going to increase jobs in America.”
Sorry, that won’t happen.
The price of cars and trucks will go up by $8,000 or so. That impacts everyone buying or leasing a car. As of 2022 there were 283 million vehicles registered in the US.
The UAW has about 400,000 members. If UAW jobs increased by 10 percent then there would be 40,000 winners and tens of millions of losers.
And it will take years, if ever, for this production to return. Trump acts like he can snap his fingers and make things happen.
He may as well command the tides.
And we have already tested this before.
Downstream Pain
February 4, 2020: Trump’s Steel Tariffs Start Cascade of Downstream Pain
Tweet Thread by Chad P. Bown.
- On Friday night, Trump admitted that US companies whose costs he has raised – by imposing tariffs on the metals they need – are no longer competitive with foreign firms. Because of his policies, they too must now be shielded from trade…
- Trump announced he was expanding the product coverage of his national security tariffs on STEEL and ALUMINUM to include “derivative” goods that use steel and aluminum as an input – eg, steel nails or aluminum bumpers.
- Imports of those “derivative” products have increased, in part because US companies have had their COSTS go up because of Trump’s tariffs on steel and aluminum. In Econ 101 terms, the cost increase shifts the US supply curve (DS) to the LEFT. That makes imports INCREASE.
- Economists call this “cascading protection.” Trump’s tariffs on inputs lead to higher costs for US companies making the downstream products, and this results in a clamoring for ADDITIONAL trade protection for those products. This was all completely predictable.
Tariffs Kill High-Paying American Jobs
April 20, 2018: Fed Study: “Tariffs Kill High-Paying American Manufacturing Jobs and Businesses”
On occasion, Fed economists get things correct even if the voting members get things backward.
For example, New York Fed economists ask and answer the question: Will New Steel Tariffs Protect U.S. Jobs?
Firms that are dependent on steel and aluminum inputs—both importers and non-importers—will face higher prices. Downstream domestic producers will have to increase their prices or reduce markups, which makes them uncompetitive relative to competing imports. Similarly, U.S. exporters that need steel or steel-related inputs will face higher input costs and will have to either increase export prices or reduce their profit margins. These effects could lead to lower employment in these steel-intensive industries and possibly plant shut downs. Researchers estimate that the number of jobs in steel-intensive industries, which they define as industries with steel inputs of at least 5 percent of total, is around 2 million—for example, manufacturers of auto parts, motorcycles, and household appliances.
It is in steel-related industries where jobs are likely to be at risk. To get a sense of the magnitude of the employment effects, we can turn to a similar episode in 2002 when President Bush introduced steel tariffs of up to 30 percent, although under different legislation. Studies of these tariffs found evidence of higher steel prices and job losses of 200,000 across the United States. This number is higher than the total number of workers employed by U.S. steel producers (187,500) at the time.
Repeat Play in Process
On February 10, 2025 I commented Trump to Impose 25 Percent Tariffs on Steel and Aluminum, Expect Higher Prices
All US consumers of steel and aluminum will pay higher prices, especially the automakers.
The reinstitution of aluminum and steel tariffs across the board is in direct violation of Trump’s loudly bragged USMCA “Best Trade Deal in History”.
Trump has proven ability to repeatedly make the same mistakes, needlessly taunt allies, and violate his own treaties.
No good, and lots of bad will come from this, just as happened before.
Whitbitch and the Dems (with help from numerous RINOs) have already destroyed what was once a terrific place to live. Nobody will notice if it gets more painful.
Funniest thing I have seen in a while.
Fox News has removed the running ticker tape on their news channel!
Fair and balanced my AZZZZZZZZZZ
Note also how they are referring to Myanmar (where the big earthquake was a couple of weeks back) by their old country name of Burma!
LOL
The UAW likes tariffs, fine, they can take a 25% pay cut.
“Tariffs Kill High-Paying American Jobs”
Globalism did that, shipping manufacturing jobs to China. China can produce an electric car for $4,000. No need for Detroit. No need for Boeing, as China could produce airliners much cheaper.
Michigan will definitely suffer. I was deep into negotiations to purchase some land to add to my farm there. As a result of trumps actions, I killed the deal. The seller has come back to me, begging me to re-open negotiations with a major price concession.
Unfortunately due to the shift in economic conditions, and the likelihood that farm production will not have a market, I will only move forward with a 40% discount.
My realtors agree that things are coming to a halt as both cropland and waterfront properties that were selling the moment they hit the market are now not even getting any calls when they list.
Short term, long term.
Short term pain. For long term pain.
What a show!
If only I could vote Papa D, unfortunately as an alien I’m prohibited.
That’s okay. I don’t vote either. Never have. Waste of my time.
A lot of Americans hate the government. Then they spend a large portion of their time promoting their parties candidate for President. It’s idiotic.
They want the government out of their lives. Then they scream for government policies that they think will make their lives better. It’s moronic.
Idiotic? Or recognizing we’re a in a doom loop of bad incentives? The political parties are fundraising organizations. To their credit, it’s an incredibly effective scam. Get everyone pissed at each other while they keep the grift going. Keep leasing access like the street walkers they are and reward the industry groups and companies by letting them author what the congress votes for. Meanwhile the ratepayers (as the utility companies call us) on the outside get to grab the bicycle rack. No lube will be offered.
What happens at inflection points, Dave? That which can’t continue, doesn’t. That’s what the WEF’s Great Reset is about. Globalist elitists have signed on to that. What does that show look like? Owning nothing and being happy about it.
As if inflating the economy with massive tariffs wasn’t bad enough, Trump now wants the Fed to lower interest rates. Great idea! The source of our trade deficits has very little to do with ‘unfair’ trade deals or trade practices. This is just fodder for the masses to cling to. The source of our trade deficits lies in the Eccles building in DC. Trump and his cronies certainly know this. If not, we have idiots at the helm.
“No good, and lots of bad will come from this…”
And so cry the special interests and global elitists. You sound like a broken record. The deed is done and the bets are on. Why are the tariff deniers so afraid to let it play out for even a month? You sound like the idiot climate alarmists forecasting the end of the world. Lol.
Yes. I agree. Let them play out. It will be fascinating to see the long term results.
How are you liking it after the first 5 days?
Like you Papa, I just wait and watch. Let’s see what opportunities come of this.
there is no magic “stop recession” button once the ball gets rolling. if we leave these insane taxes in place for even 30 days the job losses will be devastating and the damage will not be able to reverse.
The feds reversed huge job losses during covidcon. Just spray money everywhere.
Is this what winning feels like?
A 2024 article talks about their strategy: they believe in a radical ‘rebirth’ of the U.S. through a major financial crisis—one that would force a debt default, eliminate the Federal Reserve, and replace the system with a libertarian model centered on cryptocurrency.
These ideas may have sounded like conspiracy theories in the past, but in 2025, they seem more plausible. The current administration thrives on chaos as a distraction, yet its policies increasingly align with this vision of engineered collapse. Is this what’s actually happening? https://washingtonspectator.org/peter-thiel-and-the-american-apocalypse/
Plenty of north side Chicago yuppies fleeing to Traverse City the past several years to help the Michigan economy.
World is moving on from globalization.
US 35 trillion in debt and consumer unable to afford a living without increasing their own debt is result of 4 decades of what has become status quo..
This is not sustainable or correctable using the same system which created this situation.
New alliances and new sources of commodities and product are in the works.
Trump is not doing anything that would have not occurred. If after runaway deficit spending and flooding the US with illegals did not resolve problems created by Globalization under Biden doing more of what is not working will not change that outcome.
Nope. Only the US is moving away from Global Trade. The rest of the countries in the world will continue to trade with each other because it is advantageous for them to do so.
This is what you got right:
“New alliances and new sources of commodities and product are in the works.”
Yes. New alliances that exclude the USA.
The impact on Americans will be fewer jobs and higher prices.
Spell it out how running up more deficit spending, enlarging Government and consumer putting bigger balances on their credit cards is supposed to make things better.
Please enlighten me and others as we wait breathlessly for your wisdom.
When the woodpile gets low at my House I go out and cut some more.
I am unable to print it out of thin air. Economists appear to lack understanding of this most basic of Economic principles.
Lol! How about you tell me how tariffs are going to fix any of that?
If tariffs disrupt the US economy, shut down production, and raise consumer prices, how will that help?
50 countries are already reported in Talks with Trump administration about resolving differences.
Perhaps you prefer to have airhead Harris or comatose Biden representing your interests.
Still am waiting to get stunned by economic analysis showing things are going to improve by doing more of what has been going on for 40 years. Can not quite seem to find it in all the small print.
I will add, just the other night while watching Harris make a statement, my Wife asked me what did she mean.
I replied I have no idea as I do not understand what she said.
Now either Harris is such an intellectual giant that her intellect surpasses everyone or there is absolutely nothing going on between Her ears. Am of the strong opinion it is the latter case.
I have never cared about who is President. I don’t vote. So your political views mean nothing to me.
Having actually run a Business it is understood that the person getting hired better know up from down.
Or as we say in the West of England, they don’t know shit from sugar. Bout sums up the occupants of the white house.
The day of the consumer is almost over. What shall we be next?
Don’t you have a latino for that sort of blue collar manual enterprise. From my observations most Americans don’t even cut their own grass.
The U.S. hasn’t moved away from global trade. L.A. and Long Beach commercial shipping harbors haven’t been shut down.
Yet,
Trump is woking on that…
Z to B: we are not buying your houses, before or after u expire, even with low mortgage rates. Oil, chicks, red meat…are down. Highly skilled workers wages are up. $25K Ozempic out, real food and 6/18 or 8/16 cut fat. Tomatoes sauce emulsifiers render pizza: the best junk food on the planet.
ES > 2022 high. Today it might close Fri gap and move up. The puke media will bonk when ES exceeds 5,500. CSPAN: the plunge is on. No: the plunger team is on.
Cramer knows it all: 1987 is back.: sell, sell, sell.
Concur, Michigan will get decimated with all of the multiple border crossings for vehicle manufacturing. Today is Black Monday Day 20 of 20 of the 3rd fractal for western composite equities and tomorrow Black Tuesday for Asian composites. An oversold rally of 5-9 days will be likely attributed by state news to pending successful negotiations … with another black day(s) on day 12/13 of the SPX 3 Feb 2025 8/19/20/13 day :: x/2-2.5x/2.5x/1.6x terminal growth and incipient crash fractal decay series.
A low today but not the the crash… exhaustion selling in 12 additional trading days
Over the past few decades, nobody cared about where their stuff came from. Not since we started buy cheap Japanese cars in the 70’s. Remember the Datsun? As newlyweds, the only vehicle we could afford was a little Honda SUV, and we were thankful to have it when gas went to 75 cents.
Like every thing in life, except death and taxes, this too will pass. Figure it out on your own, you have to because the calvary is not coming to rescue you. I’m thankful for a paid off roof over my head, no car payments, cash in T-Bills and food in the pantry.
Count your blessings. Some people are going through rough times with health and financial issues, some of which they have brought on themselves by poor decisions. People are resilient. It’s not the Great Depression.
Liberation day was April 2. Today is April 7. Just 5 days into the greatest economic experiment in our lifetime.
And it is already exceeding my expectations.
What a show!
I understand the need for the US to bring back strategic manufacturing such as Chip manufacturing. If China took Taiwan the loss of strategic high tech Chip manufacturing would be staggering. But honestly probably 90% of manufacturing makes way more sense being done offshore. Do Americans want to work in factories that build toasters, blenders, vacuum cleaners, toys, widgets etc for minimum wage? What does that accomplish other than driving up the cost of everything?
Remember the time when moms used to fix holes in your socks? When kids clothes had patches on them? When all of your clothes were hand me downs from your older sibling? That wasn’t that long ago, common in the 70’s for Middle Class people. I was looking back at old SEARS catalogs online, from the 70s and 80s. Items were really expensive especially when you take into account the inflation wage difference.
Than all of a sudden everything became cheap and plentiful, what changed? Probably the fact that most items that used to be manufactured in the US now were manufactured in 3rd World countries bringing the costs way down and now Trump wants to drive it all back to the US? The ONLY WAY these companies could compete against 3rd World manufacturing would be Trumps Tariffs would have to stay on forever. The second he drops the Tariffs the US manufactured goods would no longer be competitive unless everything is made by automation which would in itself be very expensive to implement. Has he really thought this through?
What about agriculture? All of a sudden farmers are now able to export all of their products around the world what will happen? It could create scarcity in the US driving prices up locally. Farming is very expensive to get into. Aside from the land costs the machinery and overhead to get stated is ridiculous so I can’t imagine many more people would get into farming.
The bottom line is it would seem like the end result could be higher costs for everything. Companies aren’t stupid, they strategically locate manufacturing offshore to achieve the cheapest cost. Now Trump is holding a Tariff gun to their head giving them no choice in what works best for them and the consumer.
We won’t be buying US farm produce, relax. You can dump it on the third world at give away prices.
The 4th Industrial revolution is here and everything is changing. You have not seen anything yet.
The real problem will be the cascading “force majeure” across the country. It’ll lead to total mayhem and ultimately bankruptcies.
https://www.reuters.com/business/aerospace-defense/aircraft-supplier-howmet-may-halt-orders-if-hit-by-trump-tariffs-letter-says-2025-04-04/
Pittsburgh-based Howmet said in the letter to customers that it has declared a force majeure event, a legal practice that allows parties to a contract to avoid their obligations if hit by unavoidable and unpredictable external circumstances.
“Howmet will be excused from supplying any products or services that are impacted by this declared national emergency and/or the tariff executive order,” Howmet wrote in the letter.
Winning! /s
i love all the downvotes. people are mad at people for losing their jobs because it makes makes swiss cheese of their cockamany economic theories
The death of globalization sent oil and utility prices down, China ban grain, poultry and meat products, Their prices will plumet, Car dealers filled to the rim. Tariffs will stay on for a few more weeks until negotiations will be completed, If buyers will not pour in April dealers will offer discounts, Tesla model 3 insurance cost is higher than other ev and ICE at the same price. Tesla sales are down. Car insurance will be cheaper. If the Ukraine war will be over Russia has to convert to civilian industries. Russia will deflate in the next few years. Russia will compete with US LNG. China is losing its largest export markets: the US and the EU. China GDP/Capita will deflate. Apr 10 inflation rate is bs. JP might cut rates to lift SPX.
I’m humbled daily if not three times a day that the wise come here to discuss and debate the unexplainable world order.
It truly is an honor and privilege to be able learn from some of these beautiful minds.
“Age of discovery” according to empirical evidence written and recorded by the greatest western minds of the time, occurred from the 15th to the 18th century.
A long effing time ago beautiful minded humans discussing and debating here, now.
World wide trade among nations.
Some of you actually think that this world wide trade among nations is going to be reversed?
Just go ahead and admit that this trade among nations might be slowed a bit here and there with engineered financial panics, otherwise, business as usual.
Beautiful minded people such as yourselves are going to seek and purchase the best products to satisfy your needs and wants from the supplier that can get it to you at the quickest speed and most inexpensive cost.
Our beautiful minds don’t care where that product is produced because it is superior in every way.
IMAGINE THERE’S NO COUNTRIES!
THAT POET WAS DELUSIONAL!!
In a good way…
Because I’ve been paying attention to the professor who hosts this site,
I’m “all in” HARD assets and some funny money, wishing you are too!
Economic chemotherapy
Before reading this post, sit for a moment and take a few long and deep breaths. Because I want to set out some home truths about what just happened, as it provides an example of why the self-identifying left keeps losing. I refer, of course, to the reaction to Donald Trump’s “Liberation Day” tariffs. First, notice how many people who, just a week ago, would have told you just how awful neoliberal capitalism is, are now defending the wealthy beneficiaries of neoliberalism solely because it is Trump who has just torn up the “rules-based international order.” And so, almost everyone on the neoliberal left is today rallying behind their neoliberal overlords in defence of the status quo… See how easy it is, as Malcolm X once put it, to find yourself supporting those who oppress you?
Notice also the bit of classic Trump trolling in the shape of the penguin islands and the seemingly complex mathematical formula used to calculate the tariffs, which, sadly, too many so-called leftists have vented their energy on today… “ha-ha, orange man dumb!” There are, however, far deeper issues which need to be faced. And this requires that we step back from the political and media froth which creates and feeds upon emotional responses which serve to cloud out reason.
So, let us begin with some of the basics which this site has been talking about for more than a decade now. First, let’s talk about the exponential function. This is the area of mathematics which deals with compounding growth. And most people fail to grasp it. For example, here in the UK, the government has bet the house on something called “economic growth,” which they seem not to understand. But how much growth is desirable – 2%? 3%? 5%? One reason why financial services have struggled in recent times is because they were modelled upon pre-2008 growth rates of five percent or more. But what does five percent growth mean? Most people – including, I suspect, most of our political class – seem to assume it means five percent at simple interest. That is, we take five percent of our current economy and grow it by that much into the future.
But anything that grows by a percentage over time mirrors compound interest. That is, a five percent growth rate means adding the five percent to the current economy and then each year recalculating that five percent. So that, fourteen years from now, the economy will have doubled in size.
https://consciousnessofsheep.co.uk/2025/04/05/economic-chemotherapy/
For a fellow Brit you’re clueless.
I didn’t write that … but I;ve always thought that someone who accuses another person of being clueless… but fails to explain why… is a MORON
The UK is going to pieces
https://www.ineos.com/news/ineos-group/chemicals-coming-to-an-end-in-the-uk/
At least you put a new LP on, that constant dripping bollocks about covid etc was beginning to wear thin and becoming tedious.
I would concur, however, that here is a certain lack of direction with our clown show in SW1.
Covid and the Death Shots are a direct response to declining affordable energy
Read – Learn https://fasteddynz.substack.com/p/the-ultimate-extinction-plan-uep
Collapse and Cannibalism
8+ billion vicious starving humans and the orgy of violence that will ensue
https://fasteddynz.substack.com/p/collapse-and-cannibalism
Not everyone https://x.com/BernieSanders/status/1907826061577945127
La France Insoumise defends tariffs in my country (France experienced massive deindustrialization since the 70’s).
Way too long. Most people here understand compound interest. Don’t talk down to them.
You clearly do not understand the article… because it is NOT about compound interest — or you didn’t read it cuz anything more than two sentences bores you
Is it possible to route imports through third countries? For example, spare parts are imported from China to the UK, then slightly modified to become British products, and then exported to the United States. Would this be possible to reduce taxes?
That is what happened under Trump I. Stuff from China was routed to Vietnam or Mexico.
Now there is a 10% tariff everywhere so it’s not easy.
Yes. Last month, Trump threatened big tariffs on any country that buys Venezuelan Oil. So China and India stopped buying.
And Malaysia started buying. Just like in 2019-2021. Guess where Malaysia sends that oil?
Cry me a river. Make it here if you want to sell it here. Enter the golden age of Michigan parts manufacturers.
Sorry KGB but US society lacks the capacity to ‘reindustrialise’ and before you start jumping up an down. I have family spread across 7 US States and the state of the public STEM education is abysmal.
And who do you suppose is responsible for the abysmal state of our education system? If the solution doesn’t smack the dumbasses across the face, they wouldn’t notice it. Consider yourself smacked hard across your face.
KGB is not right in his head. Talking to him is like spitting into the wind.
You ok with paying triple for a part?
The first victim is anyone owning equities. At this very moment, based upon where the Dow futures are, the DJIA is closer to Biden inauguration day than the high of Dec 2024.
It’s only paper money until you choose to sell. Unless you have borrowed against the inflated value of your stock holdings.
Tell that to a retiree thinking about buy a new car or just their day to day expenses. Or someone with kids about to go to college this year or next.
“”There are eight million stories in the naked city…” to quote an old TV show.
There will always be some number of people who are disadvantaged by any change put in place and therefore will stand-up and yell about their problem (or have some other noseybody (“activist”) stand-up and complain for them).
However many of these people there are, a lesson for them to learn is to plan better and not wait for the very last moment they need money to sell stocks as they try to milk every penny they can.
Well that’s what they get for supposedly voting for Biden in 2020.
MAGA, making America great again, one penguin at a time