If President Trump’s trade war has a physical battleground, it is Michigan, where companies and workers are already feeling the beginning of an onslaught that could blow a hole in the state’s economy.
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.
Workers at the state’s biggest auto factories are tightening their belts, too, in case tariffs spark layoffs by causing a spike in vehicle prices and a drop in demand. Some early moves have added to their jitters. Hours after the latest tariffs took effect last week, Jeep parent Stellantis temporarily laid off about 900 workers in Michigan and Indiana who supply parts to factories in Canada and Mexico that the company idled at the same time.
One auto executive early last week darkly predicted “Chernobyl” if tariffs broadly hit imported parts, which they’re scheduled to do next month. Industry executives and analysts later said what the administration outlined Wednesday was worse than they expected.
