Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Podcast

The U.S. Auto Industry Wasn’t Built for Tariffs

Rob and Jesse talk with former Ford economist Ellen Hughes-Cromwick.

The Ambassador Bridge.
Heatmap Illustration/Getty Images

Over the past 30 years, the U.S. automaking industry has transformed how it builds cars and trucks, constructing a continent-sized network of factories, machine shops, and warehouses that some call “Factory North America.” President Trump’s threatened tariffs on Canadian and Mexican imports will disrupt and transform those supply chains. What will that mean for the automaking industry and the transition to EVs?

Ellen Hughes-Cromwick is the former chief economist at Ford Motor Company, where she worked from 1996 to 2014, as well as the former chief economist at the U.S. Department of Commerce. She is now a senior visiting fellow at Third Way and a senior advisor at MacroPolicy Perspective LLC.

On this week’s episode of Shift Key, Rob and Jesse chat with Ellen about how automakers build cars today, why this system isn’t built for trade barriers, and whether Trump’s tariffs could counterintuitively help electric vehicles. Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.

Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.

You can also add the show’s RSS feed to your podcast app to follow us directly.

Here is an excerpt from our conversation:

Jesse Jenkins: I hear often that we’re also sending parts back and forth as well — that particularly near the border with Canada, we have manufacturing parts suppliers on both sides of the border. So it’s not just the final car, it’s also pieces of the car going back and forth. How does stuff move around in this sort of complicated trade network between, Canada, the U.S., and Mexico?

Ellen Hughes-Cromwick: There is a lot of back and forth, and as you mentioned, a lot of the automotive analysts track the travel of not just the vehicles, but the parts. And the latest estimates show that in some cases, we’re going back and forth across the Ambassador Bridge here in Detroit, you know, six, eight times.

So when you say all of a sudden, as of tomorrow, I’m going to put a 25% tariff on that — I mean, that basically shutters businesses. You can’t absorb a 25% hit, especially if it’s a part or an assembled vehicle. Part of that 25% you could probably absorb, but for the thin margins that parts suppliers work for day in and day out, I mean, there’s just no way. You’re better off shuttering your business. I hate to say that, but you know, you just can’t make the equation work, with a 25% hit.

Jenkins: So this is hypothetical structure, I don’t know if this is exactly right, but so you might have engine parts manufactured in Michigan being sent to Windsor, Ontario to assemble an internal combustion engine. And then it goes back to a plant somewhere else in the U.S. to be assembled into a vehicle. Maybe you get the glass from somewhere for the windows, you know, these are all moving back and forth on a regular basis after so many years of free trade agreements between the two countries, or the three.

Hughes-Cromwick: That’s right. That’s right. And again, coming back to Michigan, because we’re so close to the suppliers in Canada, and we have the lion’s share of automotive suppliers, especially small and mid-size suppliers — so the tier two, tier three. They’re supplying to a tier one big supplier like Magna or Borg.

So you’ve got a lot of these tier two, tier three suppliers in Michigan. Well, why? Because they’re getting a part from a Canadian supplier, putting it into theirs. And maybe that’s a component that goes into an internal combustion engine that’s being produced.

This episode of Shift Key is sponsored by …

Download Heatmap Labs and Hydrostor’s free report to discover the crucial role of long duration energy storage in ensuring a reliable, clean future and stable grid. Learn more about Hydrostor here.

Music for Shift Key is by Adam Kromelow.

Green

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
AM Briefing

‘Incidents and Miscommunication’

On Michael Bloomberg’s big climate gift, SMRs in Ohio, and the consequences of a “Super El Niño”

The Strait of Hormuz.
Heatmap Illustration/Getty Images

Current conditions: Temperatures in the United Kingdom should break 100 degrees Fahrenheit this week • Heavy rain and thunderstorms are forecast to hit the East Coast later today, potentially affecting World Cup matches in Philadelphia and New Jersey • Thousands were left without power after storms in Oklahoma.


Keep reading...Show less
Green
Climate

Californians: Brace Yourselves for a Hurricane This Summer

An active Pacific cyclone season plus El Niño-warmed waters could produce a first-of-its-kind West Coast storm.

A California hurricane.
heatmap Illustration/Getty Images

Among hurricane watchers, “I” is the scariest letter in the alphabet. Since 2001, the ninth named storm of the year in the Atlantic Basin — which usually arrives around the mid-September peak of the season — has historically been the worst of the worst. Ida. Irma. Ivan. Isabel.

This year, there might not be enough storms for “I” ever to become a threat. With just eight to 14 named storms expected, the 2026 Atlantic hurricane season could very well conclude with the formation of Tropical Storm Hanna.

Keep reading...Show less
Daily Briefing

‘We Proved That America Can Still Build Big Things’

An exclusive interview with Senator Martin Heinrich on SunZia, the largest renewables project in U.S. history, which is now — finally — fully operational.

Wind turbines.
Courtesy Sunzia

The largest renewable electricity project in American history is open for business.

After almost exactly 20 years of development, permitting, and construction, the SunZia Wind and Transmission Project became officially operational on Thursday afternoon, according to its developer, Pattern Energy.

Keep reading...Show less
Yellow