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
Politics

EPA Claims Congress Killed the Green Bank

The saga of the Greenhouse Gas Reduction Fund takes another turn.

Throwing away a green bank.
Heatmap Illustration/Getty Images

On July 3, just after the House voted to send the reconciliation bill to Trump’s desk, a lawyer for the Department of Justice swiftly sent a letter to the U.S. Court of Appeals for the D.C. Circuit. Once Trump signed the One Big Beautiful Bill Act into law, the letter said, the group of nonprofits suing the government for canceling the biggest clean energy program in the country’s history would no longer have a case.

It was the latest salvo in the saga of the Greenhouse Gas Reduction Fund, former President Joe Biden’s green bank program, which current Environmental Protection Agency Administrator Lee Zeldin has made the target of his “gold bar” scandal. At stake is nearly $20 billion to fight climate change.

Keep reading...Show less
Energy

How the Interconnection Queue Could Make Qualifying for Tax Credits Next to Impossible

A renewable energy project can only start construction if it can get connected to the grid.

Power lines, money, the Capitol, and a map.
Heatmap Illustration/Getty Images

The clock is ticking for clean energy developers. With the signing of the One Big Beautiful Bill Act, wind and solar developers have to start construction (whatever that means) in the next 12 months and be operating no later than the end of 2027 to qualify for federal tax credits.

But projects can only get built if they can get connected to the grid. Those decisions are often out of the hands of state, local, or even federal policymakers, and are instead left up to utilities, independent system operators, or regional transmission organizations, which then have to study things like the transmission infrastructure needed for the project before they can grant a project permission to link up.

Keep reading...Show less
Green
Climate

AM Briefing: NOAA Nominee Vows to Fill Forecaster Vacancies

On Neil Jacobs’ confirmation hearing, OBBBA costs, and Saudi Aramco

Would-be NOAA Administrator Vows to Fill Forecaster Vacancies
Heatmap Illustration/Getty Images

Current conditions: Temperatures are climbing toward 100 degrees Fahrenheit in central and eastern Texas, complicating recovery efforts after the floodsMore than 10,000 people have been evacuated in southwestern China due to flooding from the remnants of Typhoon DanasMebane, North Carolina, has less than two days of drinking water left after its water treatment plant sustained damage from Tropical Storm Chantal.

THE TOP FIVE

1. Trump’s nominee to head NOAA vows to fill staffing vacancies

Neil Jacobs, President Trump’s nominee to head the National Oceanic and Atmospheric Administration, fielded questions from the Senate Commerce, Science, and Transportation Committee on Wednesday about how to prevent future catastrophes like the Texas floods, Politico reports. “If confirmed, I want to ensure that staffing weather service offices is a top priority,” Jacobs said, even as the administration has cut more than 2,000 staff positions this year. Jacobs also told senators that he supports the president’s 2026 budget, which would further cut $2.2 billion from NOAA, including funding for the maintenance of weather models that accurately forecast the Texas storms. During the hearing, Jacobs acknowledged that humans have an “influence” on the climate, and said he’d direct NOAA to embrace “new technologies” and partner with industry “to advance global observing systems.”

Keep reading...Show less
Yellow