Tariffs targeting Canada and Mexico could damage the U.S. auto industry, Michigan Gov. Gretchen Whitmer warned on Wednesday, just days before President-elect Donald Trump is slated to take office.
Trump has vowed to initiate significant tariffs on goods coming from Canada and Mexico if either country fails to curb illegal immigration and drug trafficking into the United States.
Whitmer, a Democrat, said in a speech in Detroit that imposing tariffs would damage supply chains and slow production lines and would cut “jobs on both sides of the border.”
“Think about this: 70 percent of all the auto parts we make in Michigan go directly to our neighbors ... the only winner in this equation is China. They would love nothing more than to watch us cripple America’s auto ecosystem all by ourselves. This is a matter of national security,” said Whitmer, who has been floated as a possible presidential candidate.
The governor said that many auto parts cross the border multiple times before they are part of a finished vehicle, and a quarter of the $700 billion of annual trade between Canada and the United States crosses the Detroit-Windsor frontier.
“Every time a Michigan auto part crosses over the border and gets taxed, those costs will be passed on to you at the dealership,” Whitmer said. “Sometimes, it happens a couple of times throughout production. That means you’ll pay more to buy a Silverado, fix the engine in your Mustang, or replace the fender on your Jeep Grand Cherokee.”
Whitmer said she and her office had been in active discussions with Ontario’s premier and other Canadian officials “to explore ways we can collaborate on tariffs, lower the cost of doing business, and protect Michigan industry and consumers.”
In her speech, Whitmer did not address statements made by Trump regarding illegal immigration and drug trafficking. Days after he won the presidency, Trump said on social media that he would sign orders to impose 25 percent tariffs on Mexico and Canada unless the countries make inroads in curbing both trends.
In a news conference at his Mar-a-Lago estate in Palm Beach, Florida, last week, Trump again promised to place tariffs on both countries while joking that Canada could become the 51st U.S. state.
“We’re going to put very serious tariffs on Mexico and Canada because Canada, they come through Canada too, and the drugs that are coming through are at record numbers,” he said.
The incoming president also said America’s neighbor to the north is being “subsidized to the tune of about $200 billion a year, plus other things. They don’t essentially have a military. They have a very small military. They rely on our military. It’s all fine, but they’ve got to pay for that.”
Meanwhile, Trump has said that tariffs would boost the U.S. economy, telling a SoftBank conference last month that tariffs “will make our country rich.”
“Tariffs, properly used, which we will do, and being reciprocal with other nations ... it'll make our country rich ... our country right now loses to everybody. Almost nobody do we have a surplus with.”
