Trump's tariffs will raise costs in Michigan's auto industry, expert says
Automotive experts believe the added costs of President Trump's tariffs will be passed on to the consumer, and the auto industry could see the biggest price shock of any goods coming from Canada, Mexico and China.
"There is no doubt that this is just the beginning," said Jan Griffiths, president and founder of Gravitas Detroit.
Although the industry was warned the tariffs were coming last month, Griffiths said there wasn't enough time for the automakers to make adjustments, such as moving suppliers or manufacturing back to the U.S.
"Of course, we've been planning forever since we knew that was coming, but that's the amount of time that we've had since February till now is not enough time," Griffiths said.
The Trump administration imposed a 25% tariff on goods and services coming from Canada and Mexico and a 10% tariff on China.
Griffiths said the suppliers could be disproportionately affected.
"The supply base is not that strong financially. But it will get to a point where they will say look unless you pay these tariffs, then we're not gonna ship you parts, and then things are gonna get really interesting," she said.
Griffiths said the supply chain is still recovering from the COVID-19 pandemic and cannot afford to pay the tariffs. Therefore, the suppliers would likely rely on the manufacturers to flip the bill. The automakers would then likely pass that cost on to the consumers.
"So when you start adding that cost up everywhere, the impact to the vehicle is anywhere from 8-12 thousand dollars per vehicle," Griffiths said.
It's still early to determine how the tariffs will affect the auto industry in the short and long term, however, Griffiths believes the automakers will find a way to survive the added financial strain.
"One thing for sure, as an industry, we are strong. We are resilient and we will find a way through it. We might not be able to see exactly what that path looks like right now, but we will find a way forward," Griffiths said.
All three countries have retaliated by announcing they would impose tariffs on the United States.
